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As a global company, Repsol is socially committedto building a brighter future by developing smartenergy that provides solutions and contributes topeople's well-being.

Respect for the environment, transparency anddiversity are just some of the values that define ourcompany. In order to achieve its goals, Repsoldraws upon two basic strengths: its workforce andits innovation drive.

Its corporate website,l repsol.com, provides easily-accessible, detailed information offering specificand useful content to everyone.

This publication is printed on ecological papermade from pulp bleached without chlorine gas,using systems to ensure that the raw materialscome from forests that are controlled and wellmanaged, guaranteeing their sustainability.

The Repsol commitment


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Repsol posted net income of €2,060million in 2012. Stripping out the effect ofthe valuation of the company's oil and gasinventories stored as a strategic reservefor Spain, Repsol's net income is up 5.4%on 2011 at €2,048 million.

Key figures

Net income

Million euros

Operating income

Million euros

3,5493,5493,5493,549

4,2864,2864,2864,286

20.8 20.8 20.8 20.8%%%%

2011 2012

2011 2012

2,1932,1932,1932,193 2,0602,0602,0602,060

Fulfillment of the Strategic PlanFulfillment of the Strategic PlanFulfillment of the Strategic PlanFulfillment of the Strategic Plan

Five of the ten key projects are now in operation.

Focus on serviceFocus on serviceFocus on serviceFocus on service

One million customers a day pass through ourservice stations.

Commitment to societyCommitment to societyCommitment to societyCommitment to society

Over €24 million invested in voluntary socialprojects.


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Dear Shareholders,

I am writing to you to inform you of the key eventsaffecting Repsol in 2012, during which thecompany posted net income of over €2,000million. This achievement very positively reflectsthe efforts made by our company to overcome themajor challenges faced during the year; primarilythe economic crisis across Spain and Europe and,in particular, the seizing of our 51% stake in YPFby the Argentine government.

In this latter case, and given the lack of anyreparation from the Argentine authorities, ourstrategy continues to center around defending therights and interests of every one of ourshareholders, pressing our willingness to enterinto dialogue and pursuing all legal meansnecessary to receive fair compensation.

"Our company hasshown its ability tostay one step aheadof and react to thechallenges ofimplementing itsStrategic Plan, whichis transforming thecompany into aneven more robustand promisingbusiness"

At the same time, during its day-to-day activitiesRepsol has repeatedly shown its ability to stay onestep ahead of and react to the challenges ofimplementing its Strategic Plan, which istransforming the company into an even morerobust and promising business.

In 2012, net income totaled €2,060 million, justshy of the €2,193 million posted the previous year.This achievement is especially significant giventhat our 2011 results included the total incomeattributable to our stake in YPF.

Our company's operating income rose by 20.8% in2012 to reach €4,286 million (stripping out YPF),highlighting the strength of our business areas onthe back of the investments made in recent years.

"We are able toovercome anychallenge by workingtogether andadopting a service-oriented approach"

In addition to earnings and headline financials, oiland gas production and reserves are both criticalvariables for all companies in our sector. TheUpstream division (exploration and production),which accounts for over half the group's operatingincome, posted significantly improved financials,with a 56% rise in its operating income and 11%higher production. Most noteworthy was therecord replacement rate of proven reservesachieved during the year, which hit 204%.

During 2012 four of the ten key projects includedin our Strategic Plan came on stream: Margarita-Huacaya (Bolivia), Mississippian Lime (United

Letter from the Chairman and CEO

States), Lubina and Montanazo (Spain) and inRussia, off the back of the incorporation of thejoint venture, AROG.

Repsol also made one of the largest oil finds in theworld in 2012 - Pao de Açúcar (Brazil), continuingthe pattern of successful discoveries that started in2005, as since then we have made eight of theworld's most important discoveries.

Turning to Spain, we are especially proud of theoutcomes of the industrial investments made atthe Cartagena and Petronor refineries. The Boardof Directors decided to proceed with bothinvestments in 2007, having reached a crossroadswhere the company could close these two facilitiesdue to their poor performance and lack ofbusiness, or transform them into Europeanleaders in terms of efficiency and profitability. Wechose the second path because of ourcommitment to Spanish society and Repsol'sfuture.

After the expropriation of YPF ordered by theArgentine government in April 2012, Repsoldecided to roll out a rigorous plan to bolster itssolvency, including the decision to sell LNG assetsto Shell. We also sold 5% of treasury shares toTemasek, thereby incorporating into ourshareholder structure a renowned investor whichintends to hold its stake long term.

Furthermore, we ramped up our investments inR&D and innovations, and have made goodprogress in the projects we are pioneering, suchas integrating differently-abled people into theworkforce and home-working. In short, wedemonstrated that we are able to overcome anychallenge by working together and adopting aservice-oriented approach.

2012 was also an important year for the RepsolCampus. The new headquarters, housing 4,000workers, reflects our culture, ourcommunication-based approach to work and ourtransparency, and is designed to promote thelatest working methods and approaches. Thecampus is also at the cutting edge in terms ofaccessibility, sustainability and safety. Everyone atRepsol is extremely proud of the Campus.

Before ending this letter, I would like to make a fewbrief remarks on the energy sector. We are goingthrough a period of significant challenges thatdeserve in-depth analysis. Europe is facing asevere crisis, slowing down consumption andspending at all levels and with no apparent end insight. Nevertheless, in other regions of the work,energy consumption is on the rise, driven by agrowing population, especially among the middleclasses. This is putting pressure on productionand the demand for natural resources.

At the same time, there is a need to tackle existing

inequalities regarding access to energy. All of theabove requires us to strike a balance between thedemands of human development and our planet'scapacity to absorb the impacts associated with ourneed for the raw materials and natural resourcesrequired to meet these demands. Success willultimately depend on our ability to manage theseresources in a sustainable way. The answer?Sustainability, efficiency and talent.

I am sure you will agree that there is no pointachieving overarching business objectives if theseare not accompanied by a strategy of sustainablegrowth. In 2012, our economic, social andenvironmental performance was once againworthy of recognition in the most prestigiousinternational rankings. We continue to exceed oursafety targets, although we are aware we must notbe complacent as there is still much left to do. Wemust continue to strive to further embed safety inour corporate culture. We must also work to cutemissions (one of the new projects of theDownstream division), and bolster our policies onenergy efficiency.

In a world that is in a constant state of flux andwhere changes are occurring at an ever fasterpace, an open and flexible approach to busienss iscritical in order to respond to emerging challengesas we identify new opportunities.

2013 stands to be another difficult year, and wewill only be able to face the prevailing headwindsthrough a service-oriented approach, hard workand team work. We will have to mobilize all ourtalent, innovate in an imaginative way, open upnew frontiers, and exploit our strengths to the bestpossible effect. An ability to stay one step ahead ofthe game and act responsibly will be fundamentalto achieving this. Repsol is an exciting project weall share, which is founded on the involvement ofits shareholders, employees, customers, suppliersand other stakeholders.

I would therefore like to end this letter byextending my heartfelt gratitude to you, ouresteemed shareholders, for your support andcontribution to our business plan, whichrepresents a thrilling challenge to which we willcontinue to dedicate all our energy.

Antonio Brufau Niubó,Antonio Brufau Niubó,Antonio Brufau Niubó,Antonio Brufau Niubó,Chairman and CEO


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2012-2016 Strategic Plan

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On May 29, 2012, Repsol unveiled its 2012-2016Strategic Plan, which has four mainstays:achieving high Upstream growth, maximizingDownstream returns, remaining financially robust,and ensuring shareholders receive competitivereturns. The company plans to invest €19,100million over the period, which will be fundedthrough the company's ability to generate cashflow. Around 80% of these investments will beearmarked for the Upstream division; Repsol'sgrowth driver. The goal is to increase hydrocarbonproduction by an average annual rate of 7% to500,000 barrels of oil equivalent per day in 2016,while achieving a proven reserve replacement ratioof over 120% for the period. Exploration andproduction activity will center around ten keyexpansion projects, among which are some of themost significant oil finds in recent years, located inBrazil, the United States, Russia, Spain,Venezuela, Peru, Bolivia and Algeria. Five of theseten projects came on stream in March 2013.

As part of Repsol's strategy, it reached anagreement to sell LNG assets to Shell. The dealsees annual divestments of over €5,000 million,exceeding the targets established in the StrategicPlan, which sets out divestments of between

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Defending shareholders'interests after the seizureof YPF

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€4,000 million and €4,500 million over the2012-2016 horizon.


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The Upstream division has cemented its positionas the company's growth driver. In 2012, all itsfinancials improved significantly: production grewby 11.3%, five new finds were made, and a provenreserve replacement ratio of 204% was achieved,an all-time record for Repsol.

By March 2013, the company had already startedproduction at five of the ten key sites defined inthe 2012-2016 Strategic Plan, located in Bolivia,the United States, Spain, Russia and Brazil amajor step forward towards its production targets.

In five of the last six years, Repsol has made one ormore of the ten most important discoveries in theworld according to market intelligence companyIHS. In the case of 2012, this key find turned outto be Pao de Açúcar (Brazil).

At December 31, 2012, Repsol participated incrude oil and natural gas exploration andproduction blocks in 28 countries either directly orthrough its investees. As part of its geographicaldiversification strategy, the company expandedoperations to four new countries (Namibia,Australia, Bulgaria and Aruba), requiring it to setup high-potential exploration assets.

The Upstream workforce managed by Repsol has

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risen by close to 150% in eight years from 1,254 to3,043 individuals, while the discovery rate standsat 31%, above the sector average.


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Defending shareholders' interests after the

seizure of YPF

Following the seizure of 51% of its stake in YPF,Repsol called for due compensation, while alsoremaining open to negotiation.

The legal strategy since April 2012 has been todefend the interests and rights of all Repsolshareholders while claiming monetarycompensation up to the value of the seized assets.

To this end, Repsol has filed various legal claimsagainst the Republic of Argentina and YPF withthe Spanish, Argentine and US courts, and with anumber of supranational bodies, citing breaches ofthe obligations assumed by the Argentinegovernment in 1999.

These include arbitration proceedings initiated byRepsol against the Republic of Argentina at theInternational Centre for Settlement of InvestmentDisputes (ICSID) for breach of the BilateralInvestment Treaty entered into by Spain andArgentina, specifying, inter alia, the obligation toavoid hindering investor activity through arbitraryor discriminatory measures. The company alsosubmitted a claim in Argentina forunconstitutional intervention, as established underarticles 13 and 14 of the country's Expropriation

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Law. Repsol also brought action against YPF inSpain for unfair competition after YPF offered thirdparties the rights to exploit strategic assets,including the Vaca Muerta assets. Yet at the sametime, the company remains open to dialogue.

Despite the unlawful and discriminatoryexpropriation, Repsol's results were not impactedin 2012, demonstrating its ability to adapt to thenew circumstances, move forward with itsstrategic plans and draw up an ambitious programof investments, as set forth in the 2012-2016Strategic Plan.


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The best refineries in Europe

The refining margin in the Downstream divisionimproved, while production was optimizedthrough projects to expand the refineries inCartagena and Bilbao, which now rank among themost advanced facilities in the sector in Europe.

Repsol's six refineries processed 37 million tons ofcrude oil in 2012, representing an increase of17.4% on 2011. On average, 74% of Spain'srefining capacity was used, exceeding the 71%reported in 2011.

The upgrades to the Cartagena refinery, broughton stream at the end of 2011 and officially openedon April 18, 2012, gave a boost to the Valle deEscombreras as an energy and industrial hub inthe region of Murcia. The influence of themodernized facility, which involved the largestindustrial investment in the history of Spain, hasgenerated wealth and jobs in the area, evidencedby two examples: Cartagena achieved the greatestgrowth among Spanish ports in 2012, whileRepsol and the Korean company SKL laid thefoundation stone for a new lubricants plant inNovember 2012.

The expansion of the Petronor refinery, officiallyinaugurated on April 3, 2013, also drove up

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efficiency and improved refining margins.


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At the forefront of diversity and work-life

balance

All Repsol's work-life balance programs are aimedat building an attractive and flexible workingenvironment in which diversity stands out andbrings innovation and competitiveness to theorganization. One of the company's core prioritiesis therefore to promote and manage diversity.

Repsol's Diversity and Balance Committeecontinued to promote the latest in managementmodels throughout 2012, such as telecommuting,flexible working hours, efficient time management,recruiting people with different abilities, andfostering cultural diversity.

Throughout 2012, the telecommuting programwas extended to industrial complexes and salesoffices throughout Spain, while a telecommutingpilot project was launched in Peru and Ecuador.

At year-end, more than a thousand peopleworldwide had signed up to the scheme,representing an annual increase of 45% anddemonstrating positive progress towards acorporate culture based on commitment, efficiencyand reaching targets. On January 23, 2013, Repsolpresented the White Paper on Homeworking,summarizing Repsol's experience as a pioneer in

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Repsol Campus, embodying corporate

values

Company values such as flexibility, innovation,respect, responsibility, collaboration, transparency,technology and creativity are imbued in the RepsolCampus, which was opened by the Prince ofAsturias on January 31, 2013.

Repsol's new headquarters in the heart of Madridprovides an opportunity to work in a different way,illustrating Repsol's status as a diverse andtransparent business. The building's architecturaldesign - made to fit what the company stands forand aims to be - has allowed the company to rollout initiatives that revolve around people, such asflexible hours, the paperless office or theintroduction of advanced telecommuting posts, allof which contribute to a new work organizationpolicy.

Every day, over 3,700 people enjoy the benefits ofthe Repsol Campus; a space designed toencourage sharing ideas in line with thecompany's new vision and brand.

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Investment in R&D and innovation, a drive to

contribute added value

In 2012, Repsol invested €83 million in R&D andinnovation projects and programs to help findsolutions to the greatest challenges of our time,such as constructing a more efficient andsustainable energy system.

Uncertainty about which will be the dominanttechnologies of the future and the remaining timeto maturity of R&D work has led Repsol to developa Strategic Technology Plan as part of its businessstrategy. The lines of work set out in the plan coverall the company's businesses: oil and gasexploration and production, the natural gas valuechain, oil refining, oil products andpetrochemicals, and the search for new types ofenergy to diversify energy production and use.

A large part of R&D&i programs are conducted atRepsol's Technology Center: a leader in innovationwith over 400 scientists which celebrated its tenthanniversary in 2012. Repsol has entered into 184agreements with universities, research centers andbusinesses to drive innovation.

Technology is one of Repsol's priority areas, asshown by initiatives such as the RepsolFoundation Entrepreneur Fund aimed at

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supporting the best business plans that providesolutions for boosting energy efficiency andsavings. This initiative forms part of Repsol'sstrategy to drive the development of innovativeprojects, and ranks among its commitments tobecoming more sustainable.


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Excellence in top-flight racing

Repsol raced in all categories of the WorldMotorcycling Championship in 2012, and beginsthe exciting 2013 season as one of the top teamsled by MotoGP riders Dani Pedrosa and MarcMárquez. Once again, Repsol took center stage inthe top motorcycling competition; the best testbed for the company's products. It is precisely theexperience acquired from developing specificproducts for top competitions that enables Repsolto remain a research leader, in turn enabling it tofulfill its customers' high expectations.

The results were a fair reflection of this: inMotoGP, the Repsol Honda Team was crownedworld champion while Dani Pedrosa came close towinning the championship. In the Moto2 category,Marc Márquez claimed the top prize, while inMoto3, Álex Rins was named best newcomer. Inorder to support grass-roots racing, Repsol jointlysponsors the Spain Speed Championship (CEV),which was won by the young rider, Álex Márquez,who is sponsored by the company. In 2012, Repsolwon the Indoor and Outdoor World TrialsChampionship in the men's category for anotheryear. Toni Bou has claimed 11 worldchampionships and at 27 years old, has won themost championships ever in the history of thesport. During the 2012 London Olympics, Repsol

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reaffirmed its commitment to the youngest sportsmen and women through its collaboration withthe Olympic Sport Support Plan (Plan ADO inSpanish).


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In 2012, Repsol's share performance was affectedby the unlawful expropriation of YPF. TheArgentine government's decision came in a yearalready marred by the impact of the economiccrisis. Share price started the year at €24, losingground during the first two quarters. Thecompany's response, through a robust StrategicPlan and solid management over the followingmonths, was felt in the market, with the year-endshare price up 37% from the annual lows.

Repsol's sharesrebounded 37%during the latter halfof the year

This upward trend accelerated in the first quarterof 2013, in which Repsol announced the sale ofLNG assets to Shell and investment firmTemasek's new stake in Repsol.

Shareholder returnsShareholder returnsShareholder returnsShareholder returns

Repsol launched its first Repsol Flexible DividendProgram in 2012, which was approved byshareholders at the General Meeting held on May31, 2012. This program substituted what wouldhave been the traditional final dividend paymentfor 2011 and the interim dividend for 2012.

The system was implemented through two capitalincreases against voluntary reserves derived fromretained earnings, with Repsol's irrevocableundertaking to purchase the resulting free shareallotment rights at a guaranteed fixed price.

Under this program, Repsol offers its shareholdersthe opportunity to receive their returns, in wholeor in part, in new paid-up shares issued by thecompany or in cash by selling their resulting freeshare allotment rights, either on the market at the

Repsol shares

Stock market performanceRepsol shares

share trading price or to the company. During theissue of new paid-up shares replacing thetraditional interim dividend payment for 2012,holders of 69.01% of the free-of-charge shareallotment rights opted to receive theirremuneration via new Repsol shares.

This achievement underscored the trend started inJuly 2012, when the holders of 63.64% of free-of-charge allotment rights opted to receive theirremuneration in new Repsol shares at the time ofthe bonus issue, replacing the traditional finaldividend payment for 2011.

Repsol's Board of Directors also resolved to submita proposal at the General Shareholders Meeting tocontinue the Repsol Flexible Dividend Programand pay shareholders a return equivalent to the2012 final dividend of approximately €0.50 pershare, including a gross cash payment of €0.04 foreach share conferring the right to remuneration.The company's third scrip dividend distributionwould also be included in this program.


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In recent years, Repsol has consolidated agrowth strategy that has enabled it todevelop new areas of business, diversifyits portfolio of assets and incorporate keyprojects that currently underpin itsposition in the global energy sector.Following the seizure of YPF, Repsolpresented its 2012-2016 Strategic Plan onMay 29, 2012, based on the followingstrategies:

Upstream growth

Repsol's growth driverRepsol's growth driverRepsol's growth driverRepsol's growth driver

Focus on explorationFocus on explorationFocus on explorationFocus on explorationOver $1,000 million invested per year

TargetsTargetsTargetsTargetsOver 7% growth in annual net production

Upstream net production of 500,000 boe/d in2016

Proven reserve replacement ratio to exceed 120%

In addition to the ten key projects, Repsol willcontinue to appraise the contingent resources,which have already been drilled:

Alaska

Our strategy

Brazil (Seat, Pao de Açúcar, Gávea, Malombe,Iguagú, Piracucá-Panoramix-Vampira, Presalinode Albacora)

Libia (NC 200)

Sierra Leona

Gulf of Mexico (Buckskin)

Maximizing Downstream returns

End of investment cycle and portfolioEnd of investment cycle and portfolioEnd of investment cycle and portfolioEnd of investment cycle and portfoliomanagementmanagementmanagementmanagement

Increase in refining margin by $3/barrel in2016.

Selected divestments of non-strategic assets.

Maximizing margins and returns onMaximizing margins and returns onMaximizing margins and returns onMaximizing margins and returns oninvestmentinvestmentinvestmentinvestment

Annual investments of €750 million to maintainfacilities and improve energy and operatingefficiency.

verage free cash flow of over €1,200 million peryear.

Driving up profits through operatingDriving up profits through operatingDriving up profits through operatingDriving up profits through operatingexcellenceexcellenceexcellenceexcellence

Financial robustness

Repsol's financial position and divestments ofnon-strategic assets will allow it to self-fund theinvestments outlined in the Strategic Plan whilemaintaining its credit rating. The sale of LNGassets to Shell on February 26, 2013 saw Repsoldisposals top €5,000 million for the year, exceedingits strategic objectives, which envisagedivestments of between €4,000 million and €4,500million through to 2016.

Competitive shareholder returns

Pay-out of 40-55% of profits generated.

Launch of Repsol Flexible Dividend Program.


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In 2012, innovation was defined as one ofthe values behind Repsol's new vision asa global business committed to people'swell-being and constructing a better futurethrough the development of smart energysources. This innovative and business-minded approach, which aims to stay onestep ahead of the challenges that lieahead, goes beyond technology toencompass other areas such as acommitment to people and theenvironment.

Repsol Campus

Innovation lies at the heart of the Repsol Campus,where over 3,700 people work. The company's newheadquarters is a corporate symbol, confirming itspledge to people, society and the environment. Itreflects Repsol's culture, embodying a new way ofworking based on a series of values and conceptsthat are already setting an example. Homeworkingand the hiring of differently-abled individuals are

Innovating products

and solutions

Asphalt made withrecycled tires

Micro-algae biofuels

Electric vehicle

Innovation

two of the initiatives shaping this corporateculture.

Equal opportunities

The plan to hire differently-abled people waslaunched in Spain in 2005 and its gradual roll-outhas led to a new reality in Repsol, which nowemploys 547 differently-abled individuals in Spain,Brazil, Ecuador, Peru, Portugal and Venezuela.

Homeworking

Repsol values, promotes and facilitates a healthybalance between work and the private life of itsemployees. What started out in 2008 as a pilotproject involving 131 volunteers is now awell-established work-life balance programcovering the entire organization. On January 23,2013 Repsol published its White Paper onHomeworking which shares the company'sexperiences with society.

Technology

Repsol believes that investments made in R&Dand innovation with leadership in mind are one ofthe key factors that make it possible to develop amore efficient and sustainable energy system,capable of simultaneously responding to the twomajor challenges in the industry: keeping up withrising energy demand and making a greatercommitment to the environment, while ensuringthe energy system remains competitive. Thecompany's focus on innovation as a driver ofchange to build a new energy model is embodiedin the Repsol Technology Center; employing 400technicians and researchers who form a multi-disciplinary team with an average age of under 40.

charging points

Fuels for top-flightracing

Spill detectionsystems

Seismic dataprocessing usingsupercomputers

New-generationgreenhouse plastics

New rubbers for theautomotive andmedical sectors


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Two of Repsol's seven values shaping allthe company's activities are related withits pledge to protect the environment andsocial responsibility. Repsol is firmlybehind the generation of cleaner energyand environmental conservation,operating under the strictest safety criteriaand ensuring the utmost reliability of itsoperations. It also works hard to respectand develop the communities with whichit interacts.

Recognition

Once again, the company's performance incorporate responsibility has been recognizedthrough its inclusion on the prestigioussustainability indexes FTSE4Good, EthibelSustainability and Dow Jones Sustainability. Thecompany received the "Gold Class" companyrating, according to the Sustainability Yearbook2012; was recognized by Newsweek magazine asthe company with the best environmentalperformance in the energy sector; and topped theClimate Disclosure Project energy sector rankingsfor management of its carbon footprint.

"Receiving this recognition is a reflection of theefforts made across the company to improve ourperformance day by day, although we must not fallvictim to self-complacency. There is still much leftto do in the area of sustainability"

Antonio BrufauAntonio BrufauAntonio BrufauAntonio BrufauRepsol Chairman

First sustainability

plans

Spain

Peru

Bolivia

Ecuador

Progress of

biodiversity action

plans

Kinteroni (Peru)

Block 16 andTivacuno (Ecuador)

Trinidad y Tobago

Launch of Margarita

Sustainable development

(Bolivia)

Through its Health andSafety andEnvironmental Policy,Repsol pledges toconsider these threeareas as essential valueswhen conducting itsactivities.

Health, Safety and Environmental Policy

Main environmental investments in 2012

Protection of the Tarragona coastlineProtection of the Tarragona coastlineProtection of the Tarragona coastlineProtection of the Tarragona coastline

€22 million

Improvement in quality of fuelsImprovement in quality of fuelsImprovement in quality of fuelsImprovement in quality of fuels

La Pampilla refinery (Peru) €7 million

A Coruña refinery €6 million

Reduction in particulate emissions from theReduction in particulate emissions from theReduction in particulate emissions from theReduction in particulate emissions from thePuertollano refineryPuertollano refineryPuertollano refineryPuertollano refinery

€5 million

Boosting efficiency at the Tarragona refineryBoosting efficiency at the Tarragona refineryBoosting efficiency at the Tarragona refineryBoosting efficiency at the Tarragona refinery

€4 million

Forward-looking

vision

Reduction in energyintensity and carbonfootprint along the entirevalue chain

Ramping up of

alternative energy

sources

AutoGas

Electrification oftransport

Bioenergy

Renewable electricitygeneration

Repsol Campus, a model of sustainability

Repsol's new headquarters is an example of howto respect the environment and marks a stepforward in office building sustainability.

Five priority action pointsFive priority action pointsFive priority action pointsFive priority action points

Sustainable land use

Efficient water consumption

Efficient energy consumption

High content of recycled materials

Indoor environmental quality

Repsol followsinternational energysector best practices toimprove itsenvironmentalmanagement systemsand contribute to theenvironmentalperformance of itssuppliers.


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The global economy continued to recover during2012, albeit at a slower pace, essentially driven bythe growth of emerging economies. The growthrate of global Gross Domestic Product (GDP)dipped from 3.8% to 3.2% per annum primarilybecause of the eurozone sliding back intorecession. It is forecast that economic activity willrise during 2013, and that a growth rate of around4% will once again be achieved from 2014.

The relative good health of the world's two largesteconomies (the United States and China) wasnoteworthy. The US grew at a rate of 2.2% perannum compared to 1.8% in 2011 thanks to thecontinuing upturn in consumer spending andprivate sector employment, and significantdevelopments in the oil and gas industry. Thesecond largest economy, China, grew by 7.9% yearon year due to the ease with which it can adapt itsmonetary policy and roll out ambitious internalreform and investment programs. As a result, itsbalance of trade surplus fell from 9% of GDP in2008 to around 3% at present.

Growth in Latin America remained stable, despiteslowing to 3% owing to less favorable external

Macroeconomic environment

conditions. Likewise, the growth in the value ofexports from the region slowed from 23.9% in2011 to an estimated variation of 1.6% in 2012.

In developed economies, efforts to reduce publicand private debt, coupled with the fragility of thefinancial system, kept growth down. This has beenmost notable in a number of eurozone countries.

The link between bank risk and sovereign risk inEurope acquired singular importance in 2012. InJune, once the deadline to achieve thecapitalization ratios imposed on systemic banks bythe European Banking Authority (EBA) hadexpired, the Spanish government requestedfinancial aid from the European Union torecapitalize several financial institutions. Spain'seurozone partners made €100,000 millionavailable and agreed to move towards a EuropeanBanking Union under a supranational supervisorwith a common deposit guarantee fund andpowers to directly recapitalize or, if necessary,liquidate banks in any member state.

Key eventsKey eventsKey eventsKey events

A major turning point in the eurozone crisisoccurred in July following the clear defense of thefuture of the euro by the European Central Bank,and the announcement of its willingness to buy,under certain conditions, government bonds ofmember states facing difficulties. All this, coupledwith the negotiations that succeeded in preventingthe United States from going over the fiscal cliff,reduced uncertainty in the markets and allowed fora recovery in confidence, increasing the riskappetite.

With regard to the Spanish economy, the effects offiscal consolidation, the downturn in the jobmarket, and the credit crunch converted externaldemand into the chief driver of domestic activity.However, the contribution of the external sectorfailed to offset declines in both public and privatespending and investment. Therefore, 2012 endedwith GDP down by 1.4%.

There were also some positive trends seenthroughout the year in key variables, such asfurther adjustments of unit labor costs,improvements in the current account balance andincreased private sector activity.

Oil pricesOil pricesOil pricesOil prices

Oil prices fluctuated wildly during 2012 inresponse to the economic climate and geopoliticalupheavals. Nevertheless, the average price of Brentcrude per barrel in 2012 was only slightly higherthan that in 2011, i.e. $111.7 compared to $111.3the previous year. In euros, the average price perbarrel stood at €86.86 in 2012, compared to€79.95 in 2011. Prices varied in three stagesthroughout the year.

In the first stage, between January and March,uncertainty surrounding the possible closure of theStrait of Hormuz by Iran was factored into oilprices as a geopolitical premium, driving up theprice of Brent crude to over $125 per barrel.

Then, during the period March through June,tensions from the conflict eased and gave way toconcerns about weak economic growth both inEurope and China. All this led to a reduction in theprice of Brent crude of almost $30 from its peak inMarch.

From August onwards, Brent crude pricesfluctuated between $109 and $113, moving up ordown in response to geopolitical and economicfactors. The spread between the maininternational oil types, Brent and WTI, againreached new heights towards the end of the yearwith an annual average spread of $17 per barrel.Among the factors influencing this spread was thesignificant new increase in the production of LightTight Oil in the United States.

Oil prices fluctuatedwildly during 2012


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During 2012, the company's managementgradually consolidated the strength of Repsol'sbusinesses, particularly after the illegalexpropriation of YPF in April 2012.

Repsol's net income amounted to €2,060 millionin 2012. Operating income came in at €4,286million, while EBITDA amounted to €6,956million. Earnings per share came to €1.70.

UpstreamUpstreamUpstreamUpstream

Operating income for the Upstream division(Exploration and Production) rose from €1,413million at December 31, 2011, to €2,208 million in2012, representing an increase of 56.3%, driven byincreased production and transaction prices andthe appreciation of the dollar against the euro. Theincrease in production is mainly due to theresumption of activity in Libya, the entering intoproduction of Phase I of Margarita (Bolivia), theincorporation of Saneco and TNO assets inRussia, start-up of production at Lubina andMontanazo (Spain) and the Mississippian Limeassets. In Trinidad and Tobago, however,production slumped year-on-year owing to theshutdowns for maintenance during the year.

LNGLNGLNGLNG

In 2012, the Liquefied Natural Gas (LNG)business generated net income of €535 millioncompared to €386 million in 2011. This increase isprimarily due to higher margins and sales volumesof LNG in 2012, partially offset by higher transportcosts in North America.

DownstreamDownstreamDownstreamDownstream

Operating income in the Downstream divisioncame in at €1,013 million, down on the €1,182million seen in 2011. Highlights for 2012 includedthe start-up of the upgraded Cartagena and Bilbaorefineries, allowing improvements in refiningmargins by increasing and optimizing production.However, results were down on the previous yeardue to the impact on inventories of falling crudeoil and oil product prices, lower sales volumes incommercial divisions as a result of the economiccrisis, and the fall in margins and sales volumes inthe chemical business unit owing to a worseningof the international outlook.

Results

Gas Natural FenosaGas Natural FenosaGas Natural FenosaGas Natural Fenosa

Repsol's 30% stake in Gas Natural Fenosagenerated operating income of €920 million,compared to €887 million in 2011. This is mainlydue to diversification and the increasingcontribution made by international operations,coupled with the added balance provided by thebusiness profile of Gas Natural Fenosa, whichallowed the company to offset the effect on incomeof the divestments carried out in 2011 andstagnating income from the regulated electricitybusiness in Spain owing to the impact of RoyalDecree-Law 13/2012.

Financial resultFinancial resultFinancial resultFinancial result

Net financial result for the consolidated group wasnegative at €857 million, compared to €862million at year-end 2011. Increased interestexpenses resulting from higher average debtbalances and the rising cost of preference shareswere offset by gains, mainly due to theappreciation of the dollar against the euro, relatedto net one-off long dollar positions held by thecompany.

TaxesTaxesTaxesTaxes

Corporation tax amounted to €1,581 million in2012, with an effective tax rate of 46% (37% atyear-end 2011). This increase in the effective taxrate is mainly due to increased net income frombusinesses with high tax burdens, such asUpstream, and prominently, in Libya.

Discontinued operationsDiscontinued operationsDiscontinued operationsDiscontinued operations

Net income from discontinued operations in 2011includes income net of taxes and minority interestscontributed by YPF S.A. and YPF Gas S.A. and theinvestee companies of both companies. Inaddition to these results, the effects resulting fromthe expropriation process from the beginning ofthe year until the loss of control are also includedfor 2012.

Repsol Group results

Million euros 2011(*)

2012 %Change

Upstream 1,413 2,208 56.3%

LNG 386 535 38.6%

Downstream 1,182 1,013 (14.3%)

Gas Natural Fenosa 887 920 3.7%

Corporation (319) (390) 22.3%

Operating income 3,549 4,286 20.8%

Financial result (862) (857) (0.6%)

Share of results of companies accounted for using the equitymethod - net of taxes

72 117 62.5%

Net income before tax 2,759 3,546 28.5%

Income tax (991) (1,581) 59.5%

Net income for the year from continuing operations 1,768 1,965 11.1%

Net income attributable to minority interests from continuingoperations

(111) (75) (32.4%)

Net income attributable to the parent from continuingoperations

1,657 1,890 14.1%

Net income for the year from discontinued operations 776 279 (64.1%)

Net income attributable to minority interests from discontinuedoperations

(240) (109) (54.6%)

Net income attributable to the parent fromdiscontinued operations

536 170 (68.3%)

Total income attributable to the parent 2,193 2,060 (6.1%)

(*) Includes the necessary amendments to the 2011 balance sheet included in the

Management Report in relation to the expropriation of Repsol's stake in YPF S.A. and YPF

Gas S.A., as described under the section "Expropriation of Repsol Group Shares in YPF S.A.

and YPF Gas S.A.".


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This net financial debt at year-end 2012 includedthe debt incurred by YPF and YPF Gas of €1,939million. Stripping out this contribution, netfinancial debt would have stood at €4,836 million,down €404 million on the figure at year-end 2012.Debt was influenced during the year by thesignificant operating cash flow generated by thebusinesses, coupled with divestments, especiallythe sale of the LPG business in Chile. Furtherhighlights for the year included the successfulimplementation of the Repsol Flexible DividendProgram and the treasury share operationsperformed throughout the year (see details in thissection). Finally, debt was pushed in the oppositedirection by the provision recognized for the loanto the Petersen Group to purchase YPF. Debt wasinfluenced during the year by the significantoperating cash flow generated by the businesses,coupled with divestments, especially the sale ofLPG business in Chile.

The net financialdebt of theconsolidated groupat year-end 2012stood at €8,938million, compared to€9,724 million in2011.

Bearing in mind the preference shares, financialdebt ex Gas Natural Fenosa was 7.432 billion at 31December 2012 compared to the 7.836 billion at31 December 2011 (excluding the debt reported byYPF and YPF Gas).

The EBITDA generated during the financial year,together with the reduction of the trade workingcapital meant that the payment of taxes,investments and interests was fully covered.

During 2012, payments on investments reached€3,907 million.

Under the divestments heading it is worth notingthe sale of the liquefied petroleum gas (LPG)business in Chile and the stake in exploration andproduction assets in Ecuador through thecompany Amodaimi.

The shares of Repsol, S.A. are listed on thecontinuous market of the Spanish stock exchanges(Madrid, Barcelona, Bilbao and Valencia) and ofBuenos Aires (Bolsa de Comercio de BuenosAires). Until March 4, 2011, the shares were listed

Financial positionThe net financial debt of the group excluding Gas Natural Fenosa,i.e. excluding the proportional integration of the figures relating tothis company, was €4,432 million at December 31, 2012, down onthe €6,775 million for the preceding year.

in New York in the form of American DepositaryShares (ADS) (New York Stock Exchange). SinceMarch 9, 2011, its ADS program is quoted on theOTCQX market, a platform within US over-the-counter (OTC) markets that distinguishes issuerswith better market information policies and solidbusiness activities.

Net financial debt, 2012

Repsol Flexible DividendRepsol Flexible DividendRepsol Flexible DividendRepsol Flexible Dividend

On January 10, 2012, Repsol paid shareholderswith dividend rights an interim dividend from2011 profits of €0.5775 gross per share, approvedby Repsol's Board of Directors on November 30,2011 for a total gross disbursement of €635million.

In 2012, Repsol launched its first ever RepsolFlexible Dividend Program, approved byshareholders at the General Meeting held on May31, 2012, substituting what would have been thetraditional final dividend payment for 2011 and theinterim dividend for 2012. The system isimplemented through two capital increasesagainst voluntary reserves derived from retainedearnings, with Repsol's irrevocable commitment topurchase shareholders' free-of-charge shareallotment rights at a guaranteed fixed price shouldthey wish. Under this program, Repsol offers itsshareholders the opportunity to receive theirremuneration, in whole or in part, in new paid-upshares issued by the company, or in cash by sellingtheir free-of-charge share allotment rights, eitheron the market at the share trading price or to thecompany.

On June 19, 2012, the Repsol Board of Directors

Million euros Consolidatedgroup

Consolidated group excl.Gas Natural Fenosa

2012 2012

Consolidated group net debt at thebeginning of the period

11,663 6,775

Elimination of net debt of YPF and YPF Gas at12/31/11

(1,939) (1,939)

Net debt of consolidated group at12/31/11 excl. YPF and YPF Gas

9,724 4,836

EBITDA (6,956) (5,419)

VVariation in trade working capital (696) (758)

Income tax expenses/reimbursements 1,534 1,365

Investments (1) 3,878 3,279

Divestments (1) (941) (637)

Dividends and other payments toshareholders

947 885

Treasury share transactions (1,388) (1,388)

Currency translation differences 46 43

Interest and other movements (2) 1,203 639

Effects associated with Petersen Group loans 1,587 1,587

Effects associated with PetersenGroup loans

8,938 4,432

approved the roll-out of the first of the capitalincreases approved at the General ShareholdersMeeting. Holders of 63.64% of the free-of-chargeshare allotment rights opted to receive theirremuneration in new shares of the company in theproportion of one new share for every 22 rights,thus resulting in the issuance of 35,315,264 newshares (2.89% of share capital prior to theincrease). Holders of the remaining 36.36% choseto accept Repsol's irrevocable commitment topurchase at a gross price of €0.545 per right, withpayment being made to shareholders on July 10,2012 and resulting in a gross disbursement of€242 million. Repsol waived the sharescorresponding to the rights acquired under thepurchase commitment.

Meanwhile, on December 19, 2012, the Board ofDirectors of Repsol approved the roll-out of thesecond capital increase approved at the GeneralShareholders Meeting (point eleven on theagenda). Holders of 69.01% of the free-of-chargeshare allotment rights opted to receive theirremuneration in new shares of the company in theproportion of one new share for every 33 rights,which resulted in the issuance of 26,269,701 newshares (2.09% of share capital prior to theincrease).

Holders of the remaining 30.99% chose to acceptRepsol's irrevocable commitment to purchase at agross price of €0.473 per right, with paymentbeing made to shareholders on January 15, 2013and resulting in a gross disbursement of €184million. Repsol waived the shares correspondingto the rights acquired under the purchasecommitment.

Treasury stockTreasury stockTreasury stockTreasury stock

Among the treasury operations for 2012 it is worthhighlighting the placement of 61,043,173 sharesin the company, representing 5% of share capitalat that date, which Repsol closed within the firstdays of January among qualified and professionalinvestors. The placement price was €22.35 pershare, for a grand total of €1,364 million. Theseshares were part of the treasury shares acquiredon December 20, 2011, at a price of €21.066 pershare, arising from the decision by the creditorbanks of Sacyr Vallehermoso not to renew the loanpreviously awarded to acquire a stake in Repsol, orto condition partial refinancing on the sale of 10%in Repsol.

In 2012, Repsol acquired treasury stockrepresenting 0.28% of share capital after thecapital increases described above and at a nominalvalue of one euro per share, for a total value of €52million. Repsol also sold treasury sharesrepresenting 0.37% of share capital for a grosscash amount of €76 million.

Moreover, within the framework of the ShareAcquisition Plan approved at the GeneralShareholders Meeting of April 15, 2011, thecompany purchased a total of 585,441 shares inRepsol, S.A. in 2012, representing 0.046% of itsshare capital and worth €9.15 million. Theseshares were then delivered to group employeesunder the terms of the same plan. Theseacquisitions were carried out by virtue of thepowers that shareholders vested in the Board ofDirectors at the General Shareholders Meeting ofApril 30, 2010.

On occasion of the first of the capital increasesdescribed earlier in this section, in July the groupreceived a total of 2,936,789 new shares for theshares held in treasury, representing 0.23% ofRepsol's share capital after the capital increase(1,256,178,727 shares).

In January 2013, following the second of the capitalincreases described in this section, the groupreceived a total of 1,904,926 new shares for theshares held in treasury, representing 0.15% ofRepsol's capital after the issue.

At December 31, 2012, treasury shares held byRepsol or any of the group companies represented5.1% of total share capital.

On March 4, 2013, the Singapore-basedinvestment company Temasek acquired Repsoltreasury shares representing 5.045% of its sharecapital at a price of €16.01 per share, resulting inthe payment of €1,036 million to Repsol.

Financial prudenceFinancial prudenceFinancial prudenceFinancial prudence

In line with its prudent financial policy, Repsolkeeps sufficient cash resources and other netfinancial instruments available, includinguntapped lines of credit, to cover the debts fallingdue over at least the next two years, and covering76% of its entire gross debt and 63% of its debtincluding preferred stock. In the case of Repsolexcluding Gas Natural Fenosa, these sameresources cover 93% of gross debt and 71% ofdebt including preferred stock.

Financial investments included under theheadings of Note 13 to the Consolidated FinancialStatements as "Other financial assets at fair valuethrough profit and loss", "Loans and receivables"(including the tariff deficit) and "Held-to-maturityinvestments" (which includes cash and cashequivalents) amount to €6,657 million, €5,240million of which correspond to Repsol, withoutincluding Gas Natural Fenosa. The group has alsounused lines of credit at its disposal for an amountof €4,425 million (excluding Gas Natural Fenosa),up from the €4,225 million at the end of 2011(excluding Gas Natural Fenosa). For theconsolidated group as a whole, the amount inarranged but unused credit lines was €5,899

million and €5,482 million at December 31, 2012and 2011, respectively, 74% of which matures afterDecember 31, 2012.

(1) As regards the Consolidated Group, at 31 December there are financial investments for

the amount of 29 million euros and financial divestments for the amount of 203 million

euros that are not reflected in this table.

(2) It mainly includes interests, paid dividends, applied stocks and the effect of social

change.


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After a fast-track parliamentary procedure, Law26,741 entered into force on May 7, 2012,declaring the 51% of Class D shares in YPF S.A.and the 51% of shares in Repsol YPF Gas, S.A.owned by the Repsol Group to be of public interestand subject to expropriation. Since then, theArgentine government has had the authority toexercise the rights conferred by the shares to beexpropriated without any prior payment ofcompensation.

From that date onwards, a suitable expropriationprocess should have been set in motion. Underthe laws of Argentina, fair and adequatecompensation should be established - if necessaryby a court ruling - and paid prior to the occupationand acquisition of the expropriated assets.

ContestationsContestationsContestationsContestations

The general shareholder meetings of YPF held onJune 4 and July 17, 2012 and the general meetingof YPF Gas held on July 6, 2012 have all beenchallenged by Repsol and by Repsol Butano,respectively, considering, among other arguments,that they were not validly constituted as havingderived from an illegitimate and unconstitutionalexpropriation process.

According to Repsol, the expropriation ismanifestly unlawful and highly discriminatory (itonly affects YPF and YPF Gas and no other oil andgas companies in Argentina; only the participatinginterest of one shareholder of both companies,namely Repsol, and not the other shareholders, issubject to expropriation); the public interest itpursues is not justified in any way; and it is a clearbreach of the obligations assumed by theArgentine government when the privatization ofYPF took place.

According to Repsol,the expropriation ismanifestly unlawfuland highlydiscriminatory

Repsol has already initiated legal actions for: (i)violation of the "Agreement between the ArgentineRepublic and the Kingdom of Spain on theReciprocal Promotion and Protection of

Expropriation of YPFOn April 16, 2012, the Argentine government began proceedingsto expropriate YPF and YPF Gas from the Repsol Group. Thatsame day, it decreed the takeover of the company, appointing anintervener with all of the powers of its Board of Directors and whoimmediately assumed control of management.

Investments"; (ii) the unconstitutionality of thetakeover of YPF and YPF Gas and of the temporaryseizure by the Argentine government of the rightsover 51% of the shares in YPF and YPF Gasdirectly or indirectly owned by Repsol and RepsolButano, respectively; (iii) the failure of theArgentine government to meet its obligation tolaunch a tender offer for the shares of YPF beforetaking control of the company; and (iv) other legalproceedings brought to prevent illegitimate use bythird parties of certain assets belonging to YPF.

Repsol is confident that such a flagrant violation ofthe most fundamental principles of legal certaintyand respect for business done in good faith willnot be ignored by the international investmentcommunity, and will receive the appropriateresponse from the courts and bodies for thesettlement of international disputes.

Accounting prudenceAccounting prudenceAccounting prudenceAccounting prudence

The accounting effect of these events is reflected inthe group's 2012 financial statements. Repsol haslost control of the management of YPF and YPFGas and accordingly, it shall deconsolidate bothcompanies as from April 16, involving:

a) Derecognizing all assets, liabilities, and minorityinterests, as well as translation differences asappropriate. The net amount of this derecognitionamounts to €4,779 million, of which €4,720million relates to YPF and the rest to YPF Gas.This amount includes €605 million of cumulativeexchange differences in the equity of bothcompanies up to the time control was lost.

b) Revaluing other assets and liabilities related toinvestments in YPF affected by the change incontrol and the expropriation process. Thisincludes the loans and guarantees related to thePetersen Group's financing of the acquisition of itsownership interest in YPF. The net value of assetsderecognized for this reason initially stood at€1,402 million, matching the provision recognizedfor the part of the loan granted by Repsol that isnot covered by any pledge of shares as collateral.The group also recorded a provision for liabilitiesand expenses totaling €54 million, covering themaximum liabilities undertaken by Repsol, asguarantor of Petersen, less the value of the sharespledged as a counter-guarantee (0.56% of YPFshare capital).

c) Recognizing the shareholding of the RepsolGroup in YPF and YPF Gas S.A. as a financialinvestment (shares), in relation to the sharessubject to expropriation - which still belong to thegroup - as well as the remaining shares owned bythe Repsol Group (51% subject to expropriation ofboth companies, with 6.43% for YPF and 33.997%for YPF Gas in remaining shares at the end of theperiod).

For accounting purposes, these shares have beenmeasured at fair or realizable value. In the case ofthe YPF shares not subject to expropriation, thisfair value will be the official market price at whichthese shares are traded. In the case of the YPFshares subject to expropriation, which are notpublicly listed, the fair value corresponds to theexpected recoverable value as a result of theexpropriation process, which in turn should beestablished based on the market value of suchshares before any threat of expropriation emerged,calculated in accordance with internationallyaccepted methods for valuing companies and asultimately determined in the arbitrationproceedings held at the International Center forSettlement of Investment Disputes (ICSID), whichRepsol recently initiated.

Notwithstanding the foregoing, Repsol haspointed out since the day following theexpropriation that, regardless of the market valueof the shares to which it is entitled, articles 7 and28 of the by-laws of YPF state that, if control istaken by the Argentine government, the purchasermust launch a tender offer for all the Class Dshares of YPF, with a price payable in cash andcalculated in accordance with predeterminedcriteria that constitute, for the purposes ofaccounting the shares, a valid reference forestimating the minimum compensation thatRepsol should obtain.

ccording to the estimate reached by Repsol of theamount resulting from this method, the valuationof 100% of YPF, at the time of the expropriation, isnot less than $18,300 million (€13,864 million,calculated at the closing exchange rate onDecember 31, 2012), and $9,333 million (€7,070million) for the 51% stake subject to expropriation.

However, for accounting purposes, the inevitablerisks and uncertainties inherent in estimations offuture events which, to a large extent, are beyondRepsol's control, should be taken intoconsideration. For this reason, the company hasprudently focused on recognizing the sharessubject to expropriation in the accounting records,avoiding a situation where a higher valuation mayforces the initial recognition of a profit arising fromthe expropriation process and which, to date,remains a contingency.

For the reasons stated above, the shares in YPF(51% subject to expropriation and 6.43% inremaining shares) have been initially recognizedfor a value of €5,623 million and the shares in YPFGas (those subject to expropriation and theremaining stake) at €50 million.

Any change in the assumptions consideredreasonable in both the jurisdictional processes andthe valuation of the rights expropriated couldresult in positive or negative changes in the

amount for which the shares in YPF and YPF Gashave been recognized and, therefore, could havean impact on the group's financial statements.

d) Recognizing deferred tax assets of €524 millionresulting from the tax effects of theabovementioned operations.

As a consequence of the aforementioned effects ofthe expropriation process, the net impact on thegroup's income statement was a loss of €38million.

Discontinued operationsDiscontinued operationsDiscontinued operationsDiscontinued operations

In accordance with International FinancialReporting Standards (IFRS), the activities of YPFand YPF Gas are considered to have beendiscontinued and the results arising from theseactivities until the loss of control, as well as theimpact on the income statement derived from theexpropriation process, have been recognizedunder the headings for discontinued operations,net of taxes on Repsol's consolidated incomestatement at December 31, 2012 and 2011.

Note 5 of the 2012 Consolidated FinancialStatements, "Expropriation of Repsol Groupshares in YPF S.A. and YPF Gas S.A." includesadditional information on the YPF and YPF Gasexpropriation process.

At December 31, 2011, YPF had proven reserves of1,013 million barrels of oil equivalent (585 millionbarrels of liquids and 2,399 billion cubic feet ofgas), representing 46% of proven reserves of theconsolidated group on that date. Since the loss ofcontrol by Repsol, these volumes no longerconstitute part of the Repsol Group's provenreserves. Meanwhile, in 2011 YPF productionreached 181 million barrels of oil equivalent (100million barrels of liquids and 453 billion cubic feetof natural gas), representing 62% of the group'stotal production for that financial year.


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Global presence >Global presence Our global strategy allows us to be presentin more than 40 countries; respect for the environment isour main operating criterion.

Upstream >Upstream: Repsol has become a world-class explorationcompany, with more than 30 discoveries since 2008.

Liquefied Natural Gas LNG >Liquefied Natural Gas LNG: In 2012, this areademonstrated that it is a consolidated, global and profitablebusiness with its sales generating solid income for thecompany.

Downstream >Downstream: The expansion of the Cartagena and Bilbaorefineries increased the competitiveness of the assets andcontributed to increased profits in refining.

Gas Natural Fenosa >Gas Natural Fenosa: 30% of Repsol in GNF generated anoperating profit of 920 million euros in 2012.

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Highlights Results Discoveries Production Reserves Investments anddivestments

Operations bycountry

In just a few years, Repsol has become aworld leader in exploration, with over 30finds since 2008. It has cemented a strongposition in the most attractive basins andhas diversified geographically, havingentered new OECD countries offeringconsiderable potential. The commitmentto oil and gas exploration and productionwill continue in coming years, with anaverage net investment of €2,950 millionthrough to 2016.

Since 2005, Repsol has completed 195 explorationwells, 60 of which led to finds and showed thefields to be economically viable (31% success rate).Discoveries ranked among the top 10 for the year:

Upstream

Highlights

Repsol is exploring theNorth Slope Basin, one ofthe most prolific fields inAlaska

More important discoveries since 2005

Year Discovery

2012 Pão de Açúcar (Brazil)

2011 Gávea (Brazil)

2009 Perla (Venezuela)

2008 Huacaya (Bolivia)

Kinteroni (Peru)

Sapinhoá (Brazil)

2007 Carioca (Brasil)

2005 I/R (Libya)

The following finds are also worthy of note:Buckskin (United States), Panoramix and AbaréOeste (Brazil), and Lubina and Montanazo(Spain), all in 2009; Sagari (Peru), in 2012;Reggane (Algeria), where seven successful drillingswere made between 2005 and 2009; and BlocksNC-186 and NC-115 (Libya), with seven successfuldrillings between 2005 and 2011.

The Repsol Upstream division includes oil andnatural gas exploration and production, andmanages its project portfolio in order to achieveprofitable, diversified and sustainable growth witha commitment to safety and the environment. Thepillars of the division's strategy, defined in the2012-2016 Strategic Plan, are based on increasingproduction and reserves, maintaining intenseexploration activity (which has turned out excellentresults in recent years), diversifying its businessgeographically by increasing its presence inOrganization for Economic Cooperation andDevelopment (OECD) countries, achievingoperational excellence and maximizing theprofitability of its plays. To this end, investmentshave been made in human capital in recent yearsto encourage this growth. Moreover, theorganizational structure has been redefined toreflect the strategic objectives and orientedtowards improving the quality of operations, whiletechnical and commercial processes have beenredesigned and standardized, and technologicalcapacities developed to operate successfully in

deep waters.

Strategic areas

Geographically, the Upstream division's strategy isbased on key traditional regions, located in LatinAmerica (mainly Trinidad and Tobago, Peru,Venezuela, Bolivia, Colombia and Ecuador) and inNorth Africa (Algeria and Libya), as well as instrategic areas for short and medium-term growththat have been consolidated in recent years. Mostsignificant among these strategic areas are UnitedStates plays (both in the important Shenzi fieldand the assets of the Mississippian Limedeposits), offshore Brazil (with the Sapinhoá(formerly known as Guara), Carioca and BM-C-33projects) and Russia (under the agreement withthe company Alliance Oil to form the joint ventureAROG).

Operations in Trinidad andTobago

Furthermore, strategic growth in the short andmedium term will also be boosted by the majorprojects under development in Venezuela(Carabobo and Cardón IV, which are expected tobegin production in 2013 and 2014, respectively),Peru, Bolivia and Brazil and, in the longer term,with the portfolio of assets being developed inNorway, Canada, West Africa, Indonesia andAlaska.

In 2012, Repsol had already started extracting oilor gas from four of its ten strategic growthprojects, demonstrating the degree of compliancewith its commitments: the first phase inMargarita-Huacaya, the Mississippian Lime plays(United States), AROG (Russia) and Lubina andMontanazo (Spain). Furthermore, the Sapinhoádeepwater field (formerly known as Guará) inBrazil entered its initial production phase in earlyJanuary 2013. These important milestones for thecompany ensure compliance with the productionlevels set out in the Strategic Plan for the2012-2016 period. Many of these projects comefrom exploration discoveries made in recent years.

Vessel hires

In order to maintain and increase its offshoreactivity, in 2012 the company contracted two ultra-deepwater drilling vessels, "Ocean Rig Mylos" and"Rowan Renaissance", which will be used in futureexploration campaigns. With "Ocean Rig Mylos",the company will be able to drill the appraisal wellsand develop the prolific BM-C-33 block (Brazil),which contains the significant discoveries of Pãode Açúcar, Gávea and Seat. Meanwhile, the"Rowan Renaissance" will be used for drillingcampaigns in Namibia, Angola, the CanaryIslands, the Gulf of Mexico and other potential

Perla (Venezuela)

targets that may arise in the medium term. Bothvessels will be available in 2013.

Well K1 (Alaska)

At year-end 2012, the Upstream division wasinvolved in oil and gas exploration and productionblocks in 28 different countries, either directly orthrough investee companies. The company wasthe operator in 26 of these countries.

In 2012, Repsol achieved a high proven reservereplacement ratio of 204%, up on the alreadyimpressive ratios reached in 2011 (162%) and2010 (131%), thus incorporating resources thatsignificantly strengthen the company's futuregrowth.


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Operating income for the Upstream division in2012 was €2,208 million, up on the €1,413 millionreported the previous year and driven by increasedproduction and higher selling prices, and theappreciation of the dollar against the euro. Theincrease in production is mainly due to theresumption of activity in Libya, the entering intoproduction of Phase I of Margarita (Bolivia), theincorporation of the assets of Saneco and TNO inRussia, start-up of production at the Lubina andMontanazo fields (Spain), and the MississippianLime plays. In Trinidad and Tobago, however,production was down on the previous year owingto the shutdowns for maintenance during the year.

In 2012, Repsol

started operating in

Namibia, Australia,

Bulgaria and Aruba,

which have

contributed

high-potential

exploration assets.Read more

Operating income

Millon euros 2011 2012 Variation2011/2012

North America andBrazil

419 380 (9)%

North Africa 99 1,298 1,211%

Rest of the world 895 530 (41%)

Total 1,413 2,208 56%

EBITDA stood at €3,438 million compared to€2,072 million in 2011.

Upstream

Results

The average sale price of Repsol's basket of liquidswas $87.35/barrel (€67.98/barrel), compared to$83.3/barrel (€59.8/barrel) in 2011. The averagegas price stood at $3.7 per thousand cubic feet,representing an increase of 5.4% on the previousyear.

The net lifting cost climbed to $3.8 per barrel. Thisfigure is similar to that for 2011 ($3.6 per barrel).The finding cost of proven reserves over the2010-2012 period averaged $9.02 per barrelequivalent.

Finished exploration wells (1)

Finished development wells 2012 (1)

Repsol's current activity by geographical area at december 31, 2012

Positive Negative Under evaluation Total

Gross Net Gross Net Gross Net Gross Net

EuropeEuropeEuropeEurope - - 1 * - - 1 *

South AmericaSouth AmericaSouth AmericaSouth America 4 * 4 1 1 * 9 2

Peru 1 * 1 * - - 2 1

Trinidad and Tobago - - - - - - - -

Venezuela - - - - - - - -

Rest of the world 3 * 3 * 1 * 7 1

Central AmericaCentral AmericaCentral AmericaCentral America - - 1 * - - 1 *

North AmericaNorth AmericaNorth AmericaNorth America - - 1 * 2 1 3 2

AfricaAfricaAfricaAfrica 1 * 1 * 2 * 4 1

AsiaAsiaAsiaAsia - - - - - - - -

OceaniaOceaniaOceaniaOceania - - - - - - - -

Total 5 1 8 3 5 2 18 6

Positive Negative Under evaluation Total

Gross Net Gross Net Gross Net Gross Net

EuropeEuropeEuropeEurope - - - - - - - -

South AmericaSouth AmericaSouth AmericaSouth America 75 16 5 1 4 1 84 18

Peru 3 * 1 * - - 4 *

Trinidad and Tobago 4 1 - - 1 * 5 1

Venezuela 20 5 1 * 1 * 22 6

Rest of the world 48 9 3 * 2 * 53 10

Central AmericaCentral AmericaCentral AmericaCentral America - - - - - - - -

North AmericaNorth AmericaNorth AmericaNorth America 254 26 1 * 5 * 260 26

AfricaAfricaAfricaAfrica 2 * - - - - 2 *

AsiaAsiaAsiaAsia 4 3 - - - - 4 3

OceaniaOceaniaOceaniaOceania - - - - - - - -

Total 335 44 6 2 9 2 350 48

Acreage No. ofexploration

wells (1)

No. of blocks(3) Net acreage (km2)(2)

Development Exploration Development Exploration Gross Net

EuropeEuropeEuropeEurope 12 41 389 18,170 - -

Total 88 600 10,506 211,657 5 *

Total 88 600 10,506 211,657 5 *

SouthSouthSouthSouthAmericaAmericaAmericaAmerica

50 27 5,685 41,301 4 *

Peru 2 5 202 19,017 - -

Trinidadand Tobago

7 - 2,363 - - -

Venezuela 8 1 849 207 - -

Rest of theworld

33 21 2,271 22,078 4 *

CentralCentralCentralCentralAmericaAmericaAmericaAmerica

- - - - - -

NorthNorthNorthNorthAmericaAmericaAmericaAmerica

7 474 559 9,791 - -

AfricaAfricaAfricaAfrica 5 37 2,692 107,470 1 *

AsiaAsiaAsiaAsia 14 20 1,181 22,376 - -

OceaniaOceaniaOceaniaOceania - 1 - 12,548 - -

* Fewer than one exploration well.

(1) A gross well is a well in which Repsol owns a working interest. The number of net wells

is the sum of the fractions of interest held in gross wells.

(2) Gross acreage is the area where Repsol owns a working interest. Net acreage is the

sum of the gross area in each acreage according to their respective working interests.

(3) The number of blocks does not include the unconventional Mississippian Lime play

(United States).


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In 2012, there were five exploration discoveriesdrilled in Pão de Açúcar (Brazil), Sagari (Peru),Tihalatine South-1 (Algeria) and Chipirón T2 andCaño Rondón Este 1 (Colombia).

In first quarter 2012, Repsol Sinopec Brasil made asignificant deepwater discovery in the CamposBasin. The discovery well, known as Pão de Açúcar,is located in block BM-C-33.

Hydrocarbons were found in two different strata,which together comprise a total column of 480meters, one of the thickest so far in Brazil. Pão deAçúcar joins the Seat and Gávea discoveries, all inthe BM-C-33 block. Gávea was included by IHS inthe list of the 10 largest discoveries in the world in2011, while Pão de Açúcar joined this list in 2012,confirming the area's considerable potential. If thehigh expectations are confirmed, this will be thefirst major oil field operated by a foreign oilcompany in Brazil.

This discovery sets a new milestone for Repsol indeepwater drilling. In August 2012, there was anew exploration discovery of gas and condensatein Block 57, in the sub-Andean area of Peru. TheSagari exploration well was successful in twodifferent formations known as Nia Superior andNia Inferior. The Sagari find reinforces thepotential of this area of Peru, where the Kinteronifield is also located.

In October 2012, an exploration well wassuccessfully completed at Tihalatine South-1(Algeria), located in the Sud-Est Illizi block. Thisgas discovery well is the first to be drilled in theblock.

Hydrocarbon discoveries were made in Colombiawith exploration wells Chipirón T2 in the Chipirónblock, and Caño Rondón Este 1 in the Rondónblock, both located in the Llanos Basin. Ecopetrolaccepted the commercial viability of bothdiscoveries in April and August, respectively.

VideoExploratory successes2012

Upstream

Discoveries

Lenght: 2'59"


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Repsol's hydrocarbon production in 2012 wasestimated at 332,434 boe/d, representing anincrease of 11.3% on figures for 2011.

The resumption of operations in Libya after thesuspension from March to November 2011accounts for most of this increase. Additionally, thecommissioning of the Margarita-Huacaya gasdevelopment project in May 2012 enabled totalgas production to rise from 3 to 9 MMm3/d.

On the other hand, gas production fell in Trinidadand Tobago owing to maintenance both of thetrains at the Atlantic LNG liquefaction plant and ofthe production platforms; in Ecuador owing to thedecline of the fields and the sale of a 20% stake inthe service contracts of block 16 and Tivacuno inSeptember 2012; and to a lesser degree in Brazilwith the natural decline of Albacora Leste.

Net production of liquids and natural gas by geographical area

Upstream

Production

2011 2012

Liquids Natural gas Total Liquids Natural gas Total

MMb Bcf MMboe MMb Bcf MMboe

EuropeEuropeEuropeEurope 1 2 1 1 2 1

Spain 1 2 1 1 2 1

South AmericaSouth AmericaSouth AmericaSouth America 26 370 92 24 372 90

Bolivia 2 35 8 2 45 10

Brazil 2 * 2 2 * 2

Colombia 1 - 1 1 - 1

Ecuador 9 - 9 7 - 7

Peru 3 37 10 3 39 10

Trinidad and Tobago 5 250 49 4 240 47

Venezuela 5 47 13 5 48 13

Central AmericaCentral AmericaCentral AmericaCentral America - - - - - -

North AmericaNorth AmericaNorth AmericaNorth America 10 3 10 10 5 11

United States 10 3 10 10 5 11

AfricaAfricaAfricaAfrica 4 12 7 17 12 19

Argelia 1 12 3 1 12 3

Libya 3 - 3 16 - 16

AsiaAsiaAsiaAsia - - - 1 - 1

Russia - - - 1 - 1

OceaniaOceaniaOceaniaOceania - - - - - -

Total net production 40 387 109 52 391 122

Production wells by geographical area at December 31, 2012 (1)

Oil Gas Gas

Gross Net Gross Net

EuropeEuropeEuropeEurope 9 6 1 1

South AmericaSouth AmericaSouth AmericaSouth America 1,083 338 166 61

Peru - - 21 2

Trinidad and Tobago 96 67 48 16

Venezuela 333 133 23 10

Rest of South America 654 138 74 33

Central AmericaCentral AmericaCentral AmericaCentral America - - - -

North AmericaNorth AmericaNorth AmericaNorth America 304 33 - -

AfricaAfricaAfricaAfrica 240 48 83 25

AsiaAsiaAsiaAsia 332 163 - -

OceaniaOceaniaOceaniaOceania - - - -

Total 1,968 588 250 87

(*) Value of production between 0 and 1.

(1) A gross well is a well in which Repsol owns a working interest. The number of net wells

is the sum of the fractions of interest held in gross wells.


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At year-end 2012, Repsol's proven reserves,estimated in accordance with the US Securitiesand Exchange Commission (SEC)'s conceptualframework for the oil and gas industry, and inaccordance with the criteria envisaged under thePetroleum Reserves Management System of theSociety of Petroleum Engineers (PRMS-SPE),amounted to 1,294 MMboe, of which 428 MMboe(33.1%) comprise crude oil, condensates andliquefied gases, and the remaining 866 MMboe(66.9%) natural gas.

f the total reserves, 25.4% are located in Trinidadand Tobago, 54.4% in the other South Americancountries (Venezuela, Peru, Brazil, Ecuador, etc.),11.8% in North Africa (Algeria and Libya), 4.1% inNorth America (United States) and approximately4.3% in Europe and Asia (Spain and the RussianFederation).

In 2012, the development of these reserves waspositive, with a total incorporation of 248 MMboefrom the Cardón IV Project in Venezuela,contributions from Sapinhoá (formerly Guará) inBrazil, the inclusion of projects in the RussianFederation and the United States and the review ofdevelopment plans in Libya. In 2012, the companyachieved a reserve replacement ratio (measuringtotal additions of proven reserves over the periodrelative to production for the period) of 204% forcrude oil, condensates, LPG and natural gas(168% for crude oil, condensates and LPG; and231% for natural gas).

At year-end 2012,Repsol's provenreserves totaled1,294 million barrelsof oil equivalent

Mississippian Lime (UnitedStates), one of the five keyprojects outlined in theStrategic Plan

Upstream

Reserves


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Operating investments in the Upstream businesstotaled €2,423 million in 2012, 33.6% up on thesame figure for financial year 2011 (€1,813million). Investment in development accounted for60% of the total and was carried out mainly in theUnited States (31%), Brazil (14%), Trinidad andTobago (13%), Venezuela (11%), Bolivia (9%) andPeru (8%). Exploration investments represented18% of total investment and were materializedchiefly in the United States (34%), Peru (21%) andBrazil (12%). The remainder corresponds to theincorporation of the assets in Russia (Saneco andTNO) and Mississippian Lime in the UnitedStates.

In Ecuador, in September 2012 the sale wasagreed of the Amodaimi Oil Company, which ownsa 20% stake in the service contracts for blocks 16and Tivacuno - both in production - to TiptopEnergy Ltd., a subsidiary of the Chinese companySinopec.

Upstream

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At December 31, 2012, the Upstream division heldmining rights in 688 blocks, with a net surfacearea of 222,163 km2. Of these, 600 are explorationblocks and cover a net surface area of 211,657 km2.Repsol is also involved in a major project involvingunconventional resources at the MississippianLime reservoir in the United States. The companydrilled 18 exploration wells in 2012, five of whichled to finds. A total of five exploration wells werebeing appraised at year-end, while a further fivewere being drilled or pending completion.

Angola Algeria Aruba

Australia Bolivia Brazil

Bulgaria Canada Colombia

Cuba Ecuador Spain

United States Guyana Indonesia

Iraq Ireland Liberia

Upstream

The Upstream division around the world

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Libya Namibia Morocco

Mauritania Mexico Norway

Peru Portugal Russia

Sierra Leone Trinidad and TobagoTunisia

Venezuela

Exploration block

Development/exploitation block

At the end of 2012, Repsol held mining rights to31 blocks in Spain: 19 for exploration, with a netsurface area of 7,267 km2, and 12 blocks inoperation that have a total net area of 389 km2.

Through its facilities in Casablanca, Rodaballo andBoquerón (Mediterranean Sea), and Poseidón(Bay of Cádiz), in 2012 Repsol produced a total of1.1 MMboe (around 2,974 boe/d). Net proven oilreserves at the end of the year are estimated tototal 5.4 MMboe.

In October, production was started at the Lubinaand Montanazo fields in the Mediterranean. Bothfields were discovered by Repsol in 2009 and areconnected to the Casablanca platform foroperational purposes. Repsol is the operator inboth cases, with a stake of 72.44% in Montanazoand 100% in Lubina.

In 2012, Repsol continued its preparatory work forfuture exploration wells in the Canarias 1 to 9blocks, including detailed processing of existing3D seismic data for the study area, along with thepreparation of an implementation report andbaseline study, as part of the correspondingEnvironmental Impact Assessment.

Spain

2012 milestones

Angola

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Exploration block

At December 31, 2012, Repsol held mining rightsto 15 blocks (including 12 with service contracts)in the country. During 2012, 2,665 km of 2Dseismic data was acquired, and 12,615 km2 of 3Dseismic data was registered.

In January 2012, the company officially includedexploration blocks 22, 35 and 37 in its acreage.The signing of these contracts with thestate-owned company Sonangol took place onDecember 20, 2011. Repsol is the operator ofblock 22, where it holds a 30% stake. It also has a25% interest in block 35 (operated by Eni) and20% of Block 37 (operated by Conoco-Phillips). In2012, the 3D seismic surveying commitments

were completed in all three blocks (12,615 km2).

Exploration block

At December 31, 2012, Repsol owned miningrights to one exploration block in the country witha net surface area of 12,548 km2.

In August 2012, the Australian governmentawarded Repsol exploration license WA-480-P,after winning the tender of April 2012. The newblock has a water depth of between 1,000 and4,500 meters.

It is located about 280 kilometers from PortHedland in the Pilbara region (Western Australia),

2012 milestones

Australia

2012 milestones

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in the northern Carnarvon Basin - the most prolificin Australia. In the next two years, there are plansto perform a campaign of 3D and 2D seismicsurveys. This new exploration license, located onthe boundary of a high potential area, is in linewith Repsol's strategy to grow in OECD countries,marking Repsol's entry as an operator in a newregion.

Exploration block

In December 2012, Repsol signed a productionsharing contract (PSC) in Aruba for the explorationof over 14,000 km2 of marine area. Water depthsrange between 50 and 3,000 meters, dependingon the site. The contract includes an explorationperiod of eight years, divided into four phases. In2013, Repsol opened an office in Aruba andregistered 3,000 km of 2D seismic data. The blockis included in the company's official acreage in2013.

Exploration block


In Algeria, Repsol held mining rights to four blocksat the end of 2012: one for exploration, with a netsurface area of 3,121 km2, and three blocks underdevelopment with a net surface area of 1,125 km2.

Aruba

Algeria

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Net production for the year was 1 MMb of liquidsand 11.9 Bscf of natural gas, with total netproduction equivalent to 3.1 MMboe (8,456boe/d), originating especially from the TFT block(operated jointly by Sonatrach and Total) and, to alesser extent, the Issaouane block operated byRepsol. Proven net reserves of liquids and naturalgas at the end of the year were estimated to total30.7 million MMboe. During 2012, 40 km2 of 3Dseismic data and 97 km of 2D seismic data wereregistered.

Currently in Algeria, Repsol has interests in theoperation of two production projects (Issaouaneand Tin-Fouye Tabankort); a major gasdevelopment project considered a key part of the2012-2016 Strategic Plan (Reggane); and oneexploration project (SE Illizi).

After obtaining authorization to commission theReggane development project from the Algerianauthorities in November 2011, preparations beganfor the first development wells in 2012. This gasproject in the Algerian Sahara includes thedevelopment of six fields (Reggane, Kahlouche,South Kahlouche, Sali, Tiouliline and SoutheastAzrafil) in the Reggane Basin, about 1,500kilometers southwest of Algiers. Production isexpected to begin in 2016. The development of thearea includes the drilling and completion of 104wells and the construction of a gas treatmentplant with a capacity of 8 million cubic meters perday, a gas storage system, a pipeline for exportand associated infrastructure, an airstrip and anelectrical system. Repsol holds a 29.25% stake inthe consortium that is to develop the project,alongside the Algerian State-owned companySonatrach (40%), Germany's RWE Dea AG(19.5%), and Edison of Italy (11.25%).

In October 2012, an exploration discovery wasmade with the Tihalatine South-1 well located inthe Sud-Est Illizi block, operated by Repsol. Thisgas exploration discovery is located in the IlliziBasin in the south-east of the country. This is thefirst well Repsol has drilled in the block. Theconsortium led by Repsol (25.725% stake andoperator) was awarded the Sud-Est Illizi block in2010 during the second national and internationaltender for exploration and development blockbids. The other partners are Enel SpA (13.475%)and GDF Suez (9.8%), while the remaining 51%stake is held by the Algerian State-ownedcompany Sonatrach. The find was made at adepth of 1,073 meters and the first tests showedgas reserves of 105,000 cubic meters per day. Inorder to confirm the potential of this block, it isplanned that four more exploration wells will bedrilled.

2012 milestones

Exploration block


At December 31, 2012, Repsol held mining rightsto 29 blocks in Bolivia, located in the Beni, Pie deMonte, Subandino Sur and Subandino Nortebasins: four for exploration, with a net surface areaof 8,266 km2, and 25 blocks in operation with atotal net area of 6,703 km2. Net output for the yearwas 2.1 MMb of oil, including condensates andliquid products separated from natural gas, and45.4 Bscf of natural gas. Total net equivalentproduction was 10.2 MMboe (27,912 boe/d) andwas fundamentally concentrated at the Margarita-Huacaya, San Antonio, San Alberto and RíoGrande fields.

The first phase of the major Margarita-Huacayagas development project went into production inMay 2012 when the gas processing plant, fluidcollection system and gas pipelines werecommissioned and the wells completed. Thisallowed total gas production to be increased from3 to 9 MMm3/d. Margarita-Huacaya is one of thekey projects in Repsol's Strategic Plan. The firstphase was completed on schedule and below theapproved budget. The second phase is currentlyunder way with the construction of a new modulein the treatment plant and the drilling ofadditional production wells. This second phase isexpected to enter operation in fourth quarter 2013,and by the latter half of 2014 total gas production

Bolivia

2012 milestones

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will amount to 14 MMm3/d. The start of the firstphase at Margarita-Huacaya sees thecommissioning of the first key developmentproject envisaged in the Strategic Plan and is animportant step demonstrating Repsol's ability tofulfill its commitment to Upstream growth and tosupply security.

In February 2012, the third gas plant entered intoservice at the Sábalo field, increasing processing

capacity from 13.4 to 22.1 MMm3/d. Between65% and 70% of production at this field isintended to cover the Gas Supply Agreement(GSA) with Brazil, with a seasonal demand in

excess of 30 MMm3/d, particularly in winter. TheSábalo field is operated by Petrobras (35%), inpartnership with Total (15%) and YPFB Andina(50%) - a company owned by Repsol with a48.92% stake.

In May 2012, YPFB and Repsol signed two newsurvey agreements to explore the areas of

Carahuaicho 8C (covering 975 km2 and located inthe department of Santa Cruz), and Casira

(covering 1,950 km2 and located in thedepartment of Potosí). Repsol is evaluating thepotential of these areas and, depending on theresults, will have the option of signing a servicecontract for exploring and developing themfurther.

As part of the 2012 exploration round, inDecember the Bolivian state-owned companyYPFB announced the awarding to YPFB-Andina,Petrobras and BG Bolivia of 10 appraisal areas toassess their potential.

Exploration block


At the end of 2012, Repsol held mining rights to12 blocks in Brazil: 10 for exploration (net surfacearea of 1,297 km2) and two development wells (netsurface area of 78 km2) located in the Santos,Espíritu Santo and Campos basins. Repsol is theoperator of five of these blocks. Net production for

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the year was 1.5 MMb of liquids and 0.3 Bscf ofnatural gas, with total net equivalent production of1.5 MMboe (4,133 boe/d) from the Albacora Lesteblock. Net proven reserves of liquids and naturalgas were estimated at 55.5 MMboe at December31, 2012. Over the course of the year, threeexploration wells were drilled, one resulting in afind. At year-end 2012, another was being drilledand a further four were at different stages ofcompletion.

All the promising results in Brazil since 2011 wereobtained by virtue of the alliance signed in 2010between Repsol (60%) and the Chinese companySinopec (40%), which led to the creation of RepsolSinopec Brasil, one of the leading private energycompanies operating in Latin America. It occupiesa strategic position in the areas offering thegreatest potential along the Brazilian pre-salt layer,and is leading exploration efforts in thehydrocarbon-rich Santos Basin alongside Petrobrasand BG. The company boasts a significant andwell-diversified portfolio of assets within thecountry, which includes a field already inproduction (Albacora Leste) and major discoveriesover recent years in blocks BM-S-9 and BM-C-33,along with the Piracucá field, located within theBM-S-7 block and currently under development,and Panoramix, in the BM-S-48 (S-M-674) block.

The major exploration discoveries made in recentyears, coupled with the development projectscurrently materializing and the agreement reachedwith Sinopec, all bolster the company's strategy inoffshore Brazil (one of the areas offering thegreatest growth in oil and gas reserves worldwide)and represent one of the key growth projects forthe Upstream division.

In January 2013, the first production well in thesouthern sector of the Sapinhoá (formerly Guará)field came on stream. This well in block BM-S-9 islocated in the deep waters of the Santos Basin.Sapinhoá is one of the company's key growthprojects. Production in the southern area ofSapinhoá is performed by the Floating Production,Storage and Offloading (FPSO) platform "Cidadede São Paulo", with capacity to process 120 kb/dof oil and 5 million cubic meters of gas per day.Throughout 2013 and 2014 and as part of theplan to fully exploit the area, new production wellswill be connected to the platform, which isexpected to reach a total crude oil production of120 kb/d in the first half of 2014. Repsol SinopecBrasil has a 25% stake in this project, inpartnership with Petrobras (45% and operator)and BG (30%).

In 2012, the Sapinhoá ADR2 development welland I6S injection well were drilled and production

2012 milestones

tests performed. The Sapinhoá P3S appraisal wellwas drilled and work commenced on theSapinhoá P4S and Sapinhoá P5S wells. Thedevelopment plan also envisions extended welltesting (EWT) at Sapinhoá North in the first halfof 2013, completion of the 18" Guara-Tupipipeline, and the conclusion of the SapinhoáSouth appraisal well. In 2012, a lease agreementfor the "Cidade de Ilhabela" FPSO platform wasawarded for a period of 20 years. This platform,with a daily production capacity of 150 kb/d of oiland 6 million cubic meters of gas per day, will beused for the production of the Sapinhoá Northfield, which is expected to come on stream in thesecond half of 2014.

Within the evaluation and development plan forthe Carioca project, also in the BM-S-9 block, in2012 the Carioca North step-out well was drilledto define the potential and extent of the Cariocaarea with greater precision, following completionof the Carioca Sela appraisal well. The positiveresults obtained at year-end with the CariocaNorth well confirm the extension of the Cariocafield. To determine the flow capacity of the well,production tests will be conducted in 2013 andnew appraisal work undertaken to define the fullpotential of the Carioca area. To achieve this, theBrazilian National Petroleum Agency (ANP)approved an additional program of activities andextended the deadline for declaring commercialviability until December 31, 2013. Thedevelopment and production project in theCarioca area is progressing on schedule and thetarget of starting production in 2016 or 2017remains unchanged.

In first quarter 2012, Repsol Sinopec Brasil madea significant deepwater discovery with the Pão deAçúcar appraisal well in the Campos Basin. Thefind is located in block BM-C-33 at a total depthof 7,210 meters, 195 kilometers off shore and at awater depth of 2,789 meters. Hydrocarbons werefound in two layers with a combined oil column of480 meters - one of the most significantdiscoveries to date in Brazil. Production testspointed to 5 kb/d of light oil and 28.5 MMscf/d ofgas flow, even with the limited flow of the installedfacilities. Pão de Açúcar joins the other discoveriesin the BM-C-33 block: Seat and Gávea. Thecompany IHS ranked the Gávea find among thetop 10 most significant discoveries in the worldlast year. Repsol's partners on this project areStatoil (35%) and Petrobras (30%). OffshoreBrazil is one of the world's fastest growing areasfor hydrocarbon reserves. If the high expectationsare confirmed, this will be the first major oil fieldoperated by a foreign oil company in Brazil. Thisdiscovery sets a new milestone for Repsol indeepwater drilling.

In 2012, work continued on the appraisal anddevelopment plan for the Piracucá field (blockBM-S-7) with the analysis of the most suitableoptions. As operator, Petrobras is weighing up themerits of developing Piracucá together with otherdiscoveries made in Piracucá to date, which havehelped better define the resources lying in thesouth-western area of the field, leaving thedefinition of the north-eastern area, where adevelopment well is planned for 2014, pendingcompletion. The basic parameters of the fielddevelopment plan are expected to be defined in2013.

The appraisal plan of the Panoramix discovery,located in block BM-S-48 (S-M-674), isprogressing according to the proposal submittedin August 2011 to the Brazilian authorities (ANP),including the drilling of an appraisal well with acontingent DST production test and the possibilityof a second well.

Exploration block

At December 31, 2012, Repsol owned miningrights to seven exploration blocks in Canada with anet surface area of 2,519 km2. In 2012, 5,086 km2

of 3D seismic data was registered.

Offshore blocks EL-1125 and EL-1126 awarded bythe East Canada Bid Round in November 2011were incorporated into the company's acreageduring the first quarter of 2012. The blocks arelocated in the Flemish Pass basin, off the coast ofNewfoundland and the Labrador Peninsula. ? Theconsortium is formed by Repsol (10%), Statoil(50% and operator) and Chevron (40%). InFebruary 2012, an agreement was announced withChevron to acquire a 20% interest in blockEL-1074R, located in the Orphan Basin, facing theCanadian coastline of the province ofNewfoundland and Labrador. Following thisagreement, the block is held by Chevron (65% andoperator), Repsol (20%) and Statoil (15%).

In November 2012 the Canada-Newfoundland &

Canada

2012 milestones

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Labrador Offshore Board awarded an exploration

block of 2,089 km2 located in the Flemish PassBasin to a consortium comprising Repsol (25%),Husky (40% and operator) and Suncor (35%).This block lies adjacent to block EL-1110, whereRepsol is also engaged with Husky and Suncor.

Exploration block


At the end of 2012, Repsol held mining rights to11 blocks in Colombia: seven for exploration, witha net surface area of 14,156 km2; and four inoperation with a net surface area of 151 km2. Netoutput during the year was 1.1 MMb (3,102 b/d ofoil). Net proven reserves at the end of the yearwere estimated to total 2.7 MMb. During 2012,two exploration wells were completed, bothresulting in discoveries, while 65 km2 of 3Doffshore seismic data was registered.

Hydrocarbon discoveries were made in Colombiawith exploration wells Chipirón T2 in the Chipirónblock and Caño Rondón Este 1 in the Rondónblock, both located in the Llanos basin. TheChipirón T2 well was completed with positiveresults in April, and the Caño Rondón Este 1 wascompleted in June. In both blocks, Repsol has astake of 12.5%. Ecopetrol accepted thecommercial viability of both discoveries in Apriland August, respectively.

In third quarter 2012, the partnership betweenRepsol and Ecopetrol was awarded a newdeepwater hydrocarbons exploration block. Theblock, called Guajira Offshore 1, has an area of12,271 km2 and is located at depths between1,500 and 3,000 meters. Each partner holds a 50%interest in this block, which is subject to atechnical appraisal agreement with a term of 36months.

Colombia

2012 milestones

Cuba

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Exploration block

Following the negative results of the Jagüeyexploration well completed in the first half of 2012,Repsol proceeded, after fulfilling the requirementsset by the Cuban authorities, to cancel theexploration contract for the area, and therefore asof December 31, 2012 Repsol no longer had anyexploration or production interests in Cubanblocks.


At the end of 2012, Repsol had mining rights inEcuador to two development blocks (block 16 andTivacuno) under a new service agreement takingeffect in 2012 and involving a net surface area of479 km2. Net production during the year totaled7.4 MMb (20,172 b/d of oil), mostly originatingfrom block 16. Net proven oil reserves at the endof the year were estimated to total 15.2 MMb. In2012 no exploration wells were completed inEcuador.

In September 2012, the sale was agreed ofAmodaimi Oil Company, a subsidiary of Chinesecompany Sinopec. Amodaimi Oil Company ownsa 20% stake in the service contracts for blocks 16and Tivacuno, both in production. The sharetransfer was completed after receiving theapproval of the Ecuadorian state in August.Consequently, Repsol, which acquired this 20%stake from Murphy Oil in 2009, regains its formerinterest of 35% in blocks 16 and Tivacuno. Theconsortium continues with Repsol as the operator,

Ecuador

2012 milestones

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in partnership with OPIC (31%), Tiptop Energy(20%) and Sinochem (14%).

Exploration block


At December 31, 2012, Repsol's Upstream divisionheld mining rights to 473 blocks located in theGulf of Mexico (Green Canyon, Alaminos Canyon,Atwater Valley, Garden Banks, Keathley Canyon,Mississippi Canyon and Walker Ridge) and Alaska(in the North Slope, Beaufort Sea and Chukchy Seabasins). A total of 467 of these are for exploration,with a net surface area of 5,808 km2, while theother six are in operation (39 km2), which is wherethe hugely important Shenzi play is sited. Repsol isalso part of a major project involvingunconventional resources at the MississippianLime reservoir. Net output for the year was 11MMboe. Net proven reserves at year-end wereestimated to total 52.6 MMboe.

In 2012, three exploration wells were finished,1,479 km2 of 3D offshore seismic data wasacquired, and 339 km2 of 3D onshore seismic dataregistered.

In January 2012, a major deal announcedpreviously in December 2011 was ratified with USoil firm SandRidge Energy to acquire 16% and25% of two large areas of unconventionalresources in the large Mississippian Limereservoir, located between the states of Kansasand Oklahoma. In the first half of 2012, Repsol

United States

2012 milestones

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was already recognizing production and reservesfrom this development in its accounts. During theyear, an intensive drilling campaign wasconducted involving close to 300 producing wells,with 700 forecast for 2013.

The company also holds a 28% stake in theproduction assets of the deepwater Shenzi field inthe Gulf of Mexico. In the second quarter of 2012,the Shenzi 9 appraisal well was drilled andcompleted, with positive results. The well beganproducing and was connected to the newManifold H in late June. To maintain pressure andenhance production levels between May andSeptember 2012, water was injected into thereservoir via two injection wells. Furtherdevelopment work to be carried out at the field in2013 includes the drilling of new injection wells,with an infill well on the western flank and adevelopment well on the northeastern flank. As ofDecember 2012, thirteen wells were producing atthe Shenzi platform, plus two further wells at theMarco Polo platform. The reservoirs have beenmatching the performance levels previouslymodeled by Repsol.

In 2012, the parameters were defined for drillingthe second appraisal well at the Buckskindiscovery, which is expected to be drilled in thefirst half of 2013. After the positive results of thefirst appraisal well in 2011, this new well willconfirm the great resource potential of thereservoir and define the field development plan,with a view to starting production between 2017and 2018. Repsol, as operator of the project in itsexploration phase, made this important discoveryin 2009 at a total depth of 9,000 meters; making itthe deepest well operated by Repsol so far andone of the deepest in the area.

In June 2012, Repsol obtained five new explorationblocks in central offshore Gulf of Mexico throughthe 216/222 Lease Sale. Repsol is the operatingcompany in three of these. This was the firstround since the moratorium was lifted by UnitedStates authorities.

In February 2012, drilling began at the majorAlaska North Slope exploration project and signsof hydrocarbons were found that are currentlyunder evaluation and to be confirmed withadditional wells. Three additional exploration wellsare expected to be drilled in 2013. Repsol joinedthis project, located in one of the most prolificareas of Alaska, in March 2011 following anagreement reached with the companies "70 & 148,LLC" and "GMT Exploration, LLC" for the jointexploration of the area. Repsol is the operator witha 70% interest. The Alaskan North Slope is aparticularly promising area, with a number ofmajor discovered reservoirs and reduced

exploration risk. Thanks to the new project, Repsolhas increased its presence in OECD countrieswhile consolidating its strategy of balancing itsexploration portfolio with low-risk assets throughonshore opportunities in a stable environment.

In early 2012, the Department of NaturalResources announced the results of thepreliminary NS-2011W bidding round for theAlaska North Slope basin, which took place onDecember 7, 2011. Repsol was awarded 13 new

exploration blocks totaling an area of 186 km2.

Also in Alaska, in November 2012 the Departmentof Natural Resources announced the preliminaryresults of the NS-2012W and BS-2012W biddingrounds. In the first round, Repsol won the mostblocks (24) in the North Slope Basin, totaling anarea of 158 km2. In the second round, Repsol was

awarded an additional block of 13 km2 in theBeaufort Sea Basin.

Repsol's diversified portfolio of projects in theUnited States, comprising assets in productionand exploration projects of great significance bothonshore and offshore, positions the country asone of the major strategic growth areas for thecompany.

Exploration block

At the end of 2012, Repsol had mining rights to anexploration block off the coast of Guyana with a netsurface area of 8,400 km2. Repsol is operator inthis block known as Georgetown.

In July 2012, exploration drilling was stopped atthe Jaguar-1X well when much higher pressureconditions than expected were encountered atdepths of almost 5,000 meters. We obtainedsamples of light crude oil with a high gas contentat two intervals, which confirms the hydrocarbon-generating potential of the area. Using theinformation obtained, work is currently under wayon the engineering design of a new well toovercome the pressure and temperatureconditions and achieve the promising targets. At

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the end of 2012, Repsol had mining rights to fiveexploration blocks in Indonesia, with a net surfacearea of 11,791 km2. In 2012, 2,990 km of 2Doffshore seismic data was registered.

2012 milestones

In 2012, the Cendrawasih Bay II seismic surveyingcommitment was completed; Repsol's first task asoperator in this block. The survey was completedwithout incident, on time and within budget,despite the difficulties of such a sensitive andremote area - located about 3,000 kilometers fromJakarta. The full interpretation results of this dataare expected for first quarter 2013.

Also in 2012, an offshore sample acquisitioncampaign was performed in East Bula and Seram,together with an aerial gravity and magnetismsurvey to obtain a better understanding of theseblocks.

Exploration block

At the end of 2012, Repsol had mining rights totwo exploration blocks in Indonesia, with a netsurface area of 2,753 km2.

At the Piramagrun and Qala Dze explorationblocks, a 2D seismic survey began in secondquarter 2012 and inspections were completedprior to measuring the gravity. These blocks wereawarded in 2011 in the eastern region ofKurdistan. Work also continued on the fieldgeology operations started in 2011. The finalgeological data is currently being processed. Allthese tasks are intended to evaluate thehydrocarbon potential of the area.

Indonesia

2012 milestones

Liberia

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Exploration block

At December 31, 2012, Repsol owned miningrights to four exploration blocks in Liberia with anet surface area of 4,298 km2.

In June 2012, the decision was reached to move tothe next phase of exploration in Block LB-15,where Repsol has a 27.5% interest. TheMontserrado-1 well covered phase onecommitments at this block.

In July 2012, the next phase of exploration beganin block LB-10, where Repsol has a 10% stake. Theresults are being analyzed to prioritize theobjectives and estimate the potential resourcesand geological risks.

Exploration block


At the end of 2012, Repsol had mining rights toeight blocks in this North African country. Ofthese, six are exploration blocks covering a netsurface area of 13,465 km2. Two blocks are inoperation and cover a net area of 1,566 km2. Netproven oil reserves at the end of the year wereestimated to total 121.7 MMb.

Throughout the year, production reached levelssimilar to those seen before the conflict thatrocked Libya in 2011, with an annual average

2012 milestones

Libya

2012 milestones

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around 300,000 barrels per day and peakproduction over 330,000 barrels per day in totalfor both blocks. Production in blocks NC-115 andNC-186 resumed in October 2011.

On March 8, 2012, the company informed Libya'sstate-owned company NOC that the force majeuresituation declared in 2011 had ended, leading tothe resumption of exploration activities in blocksNC-115 and NC-186. The Libyan authoritiesapproved the request to lengthen the concession,extending it until August 6, 2014. In 2012, adrilling unit was found to perform the explorationdrilling commitments and work was restarted toacquire 3D seismic survey from the previouslyselected contractor.

Exploration block

Iraq: At the close of 2012, Repsol owned miningrights to 2 exploration blocks in Iraq that make upa net surface area of 2,753 km2.

During the second quarter of 2012 the campaignfor registering 768 km of seismic 2D began andthe inspections prior to the gravimeter registrationat the exploration blocks Piramagrun and QalaDze finished. These were obtained in 2011 in theeastern region of Kurdistan. Field geologyoperations that were started in 2011 alsocontinued. The final geological informationobtained is being processed. All of this workserves to assess the hydrocarbon potential in thearea.

Iraq

2012 Highlights

Irlanda

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Exploration block

At the end of 2012, Repsol had mining rights totwo exploration areas in Ireland (Dunquin andNewgrange projects), which have a net surfacearea of 969 km2.

In March 2012, the company Providencetransferred the operation of exploration license LO-11/11, located in the Goban Spur Basin, toRepsol. This license was granted in 2011 in theAtlantic Margin Round and stakes in the block areas follows: Repsol (40% and operator), Providence(40%) and Sosina (20%).

During 2012, Repsol worked to prepare the firstDunquin exploration well under the FEL 3/04license, in which Repsol has a 25% interest. Thewell is expected to be drilled in 2013.

Exploration block

At December 31, 2012, Repsol owned miningrights to three exploration blocks in this countrywith a net surface area of 5,121 km2.

In June 2012, Repsol acquired from the operatorArcadia Petroleum, Ltd. a 44% interest in the 0010exploration license situated off the coast ofNamibia and including the 1910A, 1911, and2011A offshore blocks. Repsol is operator and itspartners are Arcadia (26%) and Tower/Neptune

2012 milestones

Namibia

2012 milestones

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(30%). This area is considered to have highpotential given the geological similarities thatcould exist with the pre-salt areas of Brazil.

Exploration block

In August 2012, the Bulgarian authorities awardeda consortium formed by Repsol (30%), Total(operator with 40%) and OMV (30%) the HanAsparuth exploration block in the Black Sea. Itspans an area of 14,220 km2 and is located in thewestern sub-basin of the Black Sea, at a waterdepth of between 200 and 2,000 meters. With thisaward, Repsol has added a new exploration area toits portfolio. This is a geologically complexboundary area with high prospectivity. Theawarded block was included in the company'sofficial acreage during the first quarter of 2013 andis located just 25 kilometers south of a major gasdiscovery announced in January 2012 byExxonMobil and OMV in Romanian waters.

Exploration block

At the end of 2012, Repsol held mining rights tothree exploration blocks located in the Rharb basin(offshore) and the Bechar and Missour basins(onshore), which have a total net surface area of58,620 km2.

Bulgaria

Morocco

Mauritania

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Exploration block

At December 31, 2012, Repsol had mining rightsin this African country covering an explorationblock (TA--10) with a net surface area of 10,115km2 located in the Taoudenni Basin. Repsol holdsa 70% stake in this block and is operator, while theremaining 30% is held by the German companyRWE Dea.

Work continued throughout 2012 on theEnvironmental Impact Assessment for thisexploration block.


Repsol operates the Reynosa-Monterrey block inthe north of the country through a multi-servicecontract. At year-end 2012 there were 46production wells, the production of which is notreflected in Repsol's accounts since it belongs toPemex. In 2013, work is scheduled to increaseproduction in the block.

Repsol started this operation in March 2004. Thecontract was awarded in 2003 during the firstinternational tender process called by Pemex totake part in the development and production ofgas fields in Mexico.

Mexico

Norway

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Exploration block

At the end of 2012, Repsol held mining rights to14 exploration blocks in Norway, with a net surfacearea of 2,360 km2. The company acts as operatorin three of them (PL-541, PL-531 and PL-642). In2012, 20,601 km of 2D seismic data and 5,876km2 of 3D seismic data were acquired, while 175km of 2D seismic data was registered. In 2012, anexploration well was drilled with negative results.

In recent years, Repsol has been consolidating asignificant portfolio of plays in this Scandinaviancountry, in line with its strategy of geographicdiversification and increased presence in OECDcountries.

Under the PL-531 license, preliminary work wasperformed in 2012 prior to the drilling of theDarwin exploration well, which commenced inMarch 2013. This exploration license, operated byRepsol, was obtained by acquiring a 20% stake inthe operator Marathon in January 2011. This willbe the first exploration well operated by Repsol inNorway, more specifically in the Barents Sea.

Under the PL-529 license, obtained by purchasinga 10% interest from the operator Eni in January2011 and located in deep waters in the south westof the Barents Sea, a pilot well was drilled inAugust 2012 in preparation for the Bønnaexploration well, planned for third quarter 2013.

In January 2013, the Norwegian authoritiesawarded Repsol the PL 692 License in the Awardsin Predefined Areas (APA) bidding round. Thisarea in the Norwegian Sea consists of blocks6509/3, 6510/1 and 6510/2. Repsol will act asoperator with a 40% stake, in partnership withEdison (30%) and Skagen44 AS (30%).

2012 milestones

Peru

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Exploration block


At December 31, 2012, Repsol held mining rightsto seven blocks in Peru: five for exploration, with anet surface area of 19,017 km2; and two inoperation with a net surface area of 202 km2. In2012, net oil and gas production in Peru totaled 10MMboe (27,094 boe/d), originating from blocks 56and 88 (Camisea reservoir). Net production ofcrude oil was 3 MMb, including condensates andliquid products, while natural gas totaled 38,600Bscf. Proven reserves of crude oil and gas wereestimated to be 282.1 MMboe at the end of theyear. Two exploration wells were completedthroughout 2012, one of which led to a find.

In 2012, the supply of natural gas from theCamisea field, where Repsol has a 10% interest,continued normally to the Peru LNG liquefactionplant. The Camisea field comprises blocks 56 and88, where production is intended for the localmarket and to supply the Peru LNG liquefactionplant. In April 2012, the Directorate General ofEnergy Environmental Affairs of the PeruvianMinistry of Energy and Mines approved theEnvironmental Impact Assessment to explore anddevelop the area of San Martín Este in block 88 ofthe Camisea field. This block is under productionat the Cashiriari and San Martín fields.

In August 2012, there was a new explorationdiscovery in Peru of gas and condensate in Block57, in the sub-Andean area of the country. TheSagari exploration well was successful in twodifferent formations known as Nia Superior andNia Inferior. Repsol is the operator of the block,with a share of 53.84%, while Petrobras holds theremaining 46.16%. The Sagari find reinforces thepotential of this area of Peru, where the Kinteronifield is also located. Production tests at Sagari,conducted at depths between 2,691 and 2,813meters, resulted in a flow of 26 MMscf/d with1,200 b/d of condensate (liquid hydrocarbons) inone of the formations, and 24 MMscf/d and 800b/d of condensate in another. Between both tests,levels of almost 11 kboe/d were obtained. Repsolis continuing with the exploration of otherstructures in this block.

Hitos 2012

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Throughout 2012, the plan to develop theKinteroni field was completed; another of thecompany's key projects. This plan was launched inmid-2010 and has involved drilling, completion,and testing of production wells and theconstruction of surface facilities and pipelinesystem to the Malvinas plant. At year-end 2012,the field was readied for start of production in2013. The Kinteroni field is in Block 57, located incentral-eastern Peru, east of the Andes, in theUcayali-Madre de Dios basin. Kinteroni wasdiscovered in January 2008 and was one of thegreatest discoveries in the world that year.

In 2012, Ecopetrol and Repsol Exploración agreedto the sale of 30% of lot 109, which was fully heldby Repsol. This block, which is located in theSantiago and Huallaga basins, is in its thirdexploration period. The transaction is pendingofficial approval.

Exploration block


At year-end 2012, Repsol held mining rights to 13exploration blocks in Russia with a net surface areaof 7,832 km2, and 14 development blocks with anet surface area of 1,181 km2. In 2012, 6,279 km of2D seismic data was acquired.

In August 2012, Repsol and Alliance Oilcompleted the first phase of their joint project forthe exploration and production of hydrocarbonswith Alliance Oil transferring assets to the AROGjoint venture and Repsol purchasing shares. Thisproject was approved in an agreement signed inDecember 2011. AROG will serve as a growthplatform for both companies in the RussianFederation, the largest producer of gas and oil inthe world. In August 2012, Alliance Oil contributedits subsidiary Saneco, which encompassesexploration and production activities in theSamara region (Volga-Urals Basin), with provenand probable reserves in 11 oil fields already inproduction. Meanwhile, Repsol acquired shares inthe new company on the path to acquiring a 49%

Russia

2012 milestones

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stake in it. In third quarter 2012, Repsolrecognized production and reserves from thisimportant project in its books.

In December 2012, Alliance Oil transferred assetsof its subsidiary Tatnefteodatcha (TNO) to theAROG joint venture. These assets are located inthe Russian region of Tatarstan (Volga-Uralsbasin) and consist of two oil fields with theirrespective exploration and production licenses.

In January 2013, Repsol transferred the assets ofEurotek to AROG, including two major gas fields:Syskonsyninskoye (SK), which entered productionin February 2013, and Yuzhno-Khadyryakhinskoye(YK), which is in the final appraisal phase beforeentering development. Accordingly, the jointventure AROG between Alliance Oil (51%) andRepsol (49%) was officially formalized in January2013.

This agreement with Alliance Oil combines itsknowledge and access to exploration andproduction opportunities in Russia with Repsol'sfinancial and technical ability, thus forging along-term alliance for exploration and productionactivities. Under the venture, the partners willjointly seek out new expansion opportunities byacquiring oil and gas assets in Russia.

In 2012, Eurotek-Yugra (100% Repsol) wasawarded three exploration licenses:Karabashskiy-78, Karabashskiy-79 and Kileyskiy fora period of five years. The licenses are located inWestern Siberia-Khanty-Mansiysk (Yugra), Okrugregion, in the Ural-Frolov basin.

In October 2012, confirmation was receivedawarding block Salymsky 6 (Repsol 100%), whichwas part of the June-July 2012 bidding round inwhich Repsol participated.

Progress was also made during the year preparingtwo exploration wells in the Karabashki 1 and 2blocks so as to begin drilling at the beginning of2013.

Exploration block

Sierra Leone

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At the end of 2012, Repsol had mining rights toone offshore exploration block in Sierra Leone,with a net surface area of 1,273 km2. The companyhas a 25% interest in the SL-07B-10 block, whichoriginates from the retained areas of the formerSL-6 and SL-7 blocks awarded in January 2003. Thedepth of the water in the block varies between 100and 3,800 meters.

In 2012, the Jupiter-1 exploration well was drilledoff the coast of Sierra Leone with good resultsthat are currently being evaluated. The well foundan oil column of 30 meters, which seems toreinforce the high hydrocarbon potential of aregion that, until now, has been largely unexplored.The consortium, made up by Repsol (25%),Anadarko (55% and operator) and Tullow (20%),drilled this well in block SL-07B-10 at a depth of6,465 meters in 2,200 meters of water, in the samearea as the Mercury-1 exploration well completedin 2010. Another well (Mercury-2) was also drilledwith no discovery.


At the end of 2012, Repsol had mining rights inTrinidad and Tobago to seven offshoredevelopment blocks (net surface area of 2,363km2), including 30% of the offshore explorationand production assets of the company BPTT inTrinidad and Tobago through the stake held in thecompany BPRY. Net production for the year was 4MMb of liquids and 240 Bscf of natural gas, withnet equivalent production of 46.7 MMboe

2012 milestones

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(127,550 boe/d). Net proven reserves of oil andnatural gas were estimated at 329.1 MMboe atDecember 31, 2012. No exploration wells weredrilled in Trinidad and Tobago in 2012.

In the second half of 2012, a gas discovery withthe Savonette appraisal well was announced atBPTT's play, in which Repsol holds a 30% stake.Initial projections are that the estimated resourcesof the gas field can be doubled following the newfind. This appraisal well, in production sinceNovember 2012, was drilled to the east of thefield, at a depth of 90 meters in the Columbusbasin, 80 kilometers off the east coast of Trinidadand Tobago. The total depth of the well was 5,700meters. Savonette was discovered in 2004 duringexploration drilling at Chachalaca and went intoproduction in 2009. BBTT operates an extensiveoffshore area, the production of which is sent tothe liquefaction trains at the Atlantic LNG plant.

In 2012, processing was completed of the 3Dseismic data registered in the previous year in theTSP offshore producing blocks. The goal is tocomplete the seismic survey for the area andevaluate the exploration potential remaining in theasset. Other new drillable prospects were alsoidentified during the year. Repsol is the operator ofthe TSP blocks, holding a 70% interest.

Exploration block


At December 31, 2012, Repsol held mining rightsto nine blocks in Venezuela: one for exploration,with a net surface area of 207 km2, and eightblocks under development with a net surface areaof 849 km2. Net production for the year was 4.8MMb of oil and liquids separated from natural gas,and 47.9 Bscf of natural gas, which equate to 13.4

2012 milestones

Venezuela

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MMboe (36,525 boe/d), mainly originating fromthe Quiriquire, Barúa Motatán, Mene Grande andYucal Placer blocks. Proven net reserves of crudeoil and natural gas were estimated to be 240.7MMboe at the end of the year.

In August 2012, the Venezuelan authoritiesapproved the declaration of commercial viabilityand the development plan for the Perla field,located in the Cardón IV block, Gulf of Venezuela.Under the terms of the gas license, the mainpartner, Petróleos de Venezuela (PDVSA), has theright to participate with a 35% stake in thedevelopment of the project, in which Repsol andEni will hold the remaining 65% in equal parts.The development plan for this key project sets outthree phases depending on the volumes ofnon-associated natural gas to be produced: thefirst for 300 MMscf/d and a planned productionstart in 2014, a second phase of 800 MMscf/d,and a third of 1,200 MMscf/d.

The development will involve a series of tasks tobe performed simultaneously, both on land and atsea, most notably the re-entry of wells alreadydrilled during the exploration phase and thedrilling of new wells, the construction andinstallation of offshore platforms, the laying ofproduction pipelines, the construction of theonshore gas processing and treatment plant andthe pipeline from the gas treatment plant to thepoint of delivery to PDVSA Gas.

The gas license includes a number of socialcontributions to the community, as established bythe Ministry of Energy and Mining, to foster thedevelopment of local communities in the area. In2012, orders were placed for the purchase of longlead items (LLI) and pipes were delivered in theCardón area for the construction of the flow line,which will connect the offshore platforms to thefuture onshore treatment plant.

Work also began on the detailed engineering forthe onshore processing plant, while progress wasmade in the process of awarding the rig contract,which is expected to start working in fourthquarter 2013.

The Perla mega-field was discovered by Repsoland Eni in 2009 within the larger Cardón IV block,which is located in shallow waters of the Gulf ofVenezuela, roughly 50 kilometers from the coast. Atotal of five wells have been drilled and will be putinto production using platforms and subseaconnections to carry the gas to shore forprocessing and evacuation to the Venezuelandistribution network, under the terms of thedevelopment plan.

In the other key growth project in Venezuela - theCarabobo heavy crude oil project - progress wasmade in 2012 on the development work aimed atinitiating accelerated production in 2013 and early

production for the project around 2014.

The permanent production facilities are expectedto be operational in 2016, reaching the expectedproduction plateau of 400,000 barrels of oil in2017 following the commissioning of the oilupgrader. The process of selecting the engineeringteam that will perform the FEED (Front EndEngineering Design) is under way. This upgrader,with a processing capacity of 200 kb/d, willincrease the quality of the crude to 32º API.

In 2012, the first phase of the 3D seismiccampaign was performed throughout the block,and drilling was completed in seven stratigraphicwells. The conceptual engineering for theaccelerated production project was alsocompleted, with approval to build a processingplant with a capacity of 30 kb/d and completionof the conceptual engineering of the permanentfacilities.

In late December 2012, start of production wasannounced at the first well envisaged under theaccelerated development plan for the Carabobofield.

The Venezuelan government awarded this projectto a consortium of international companiesheaded by Repsol, which holds an 11% stake, inFebruary 2010.

This important project, undertaken jointly withPDVSA, involves developing the heavy crude oilreserves in the Carabobo 1 Norte and Carabobo 1Centro areas located in the Orinoco PetroleumBelt.

This area has among the largest reserves ofundeveloped oil to be found in the world.Production will reach 400,000 barrels of oil per dayover 40 years. Part of the heavy crude oil obtainedfrom the project will be sent to Repsol's Spanishrefineries, allowing the company to profit from itsinvestment in advanced deep conversiontechniques at the refineries.

Exploration block

In December 2012, Repsol held mining rights inthis country to three exploration blocks with a net

Tunisia

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surface area of 7,560 km2. The three offshoreblocks were acquired in 2011.

During the exploration phase, Repsol is to act asoperator with a 100% interest. A total of 6,768kilometers of existing 2D seismic data wasreprocessed in 2012 to further our knowledge ofthe area.

Exploration block

At the end of 2012, Repsol had mining rights to sixexploration blocks in Portugal, with a net surfacearea of 7,574 km2.

In September 2012, an asset swap agreement wasformalized with the company Partex. Through thisagreement, Repsol exchanged its 10% interest inthe Algarve blocks (Lagosta and Lagostim), whereit reduced its stake to 90%, for a 15% interest inthe Peniche blocks (Camarao, Mexilhao, Almeijoaand Ostra). These last blocks include Petrobras(operator, 50%), Galp (30%), Repsol (15%) andPartex (5%) as partners.

In 2012, a total of 1,506 km2 of 3D seismic datawas acquired for processing in the Lagosta andLagostim blocks. In 2013, the seismicinterpretation will take place along with theidentification of prospects, with the initialobjective of drilling an exploration well in 2014.

Portugal

2012 milestones


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Highlights Results Assets and Projects LNG transportand marketing

Investments anddivestments

The liquefied natural gas (LNG) divisionproved itself to be a well-established,global and profitable business in 2012,capable of generating solid value. On theback of the policy to maximize profitabilityand operating efficiency, this excellentposition was monetized through the saleof assets to Shell for $6,653 million onFebruary 26, 2013. The deal, whichexcluded assets in North America, led to apre-tax gain of $3,500 million for Repsol.

Repsol's sell-off of LNG assets attracted alot of interest on the market, resulting inover 12 offers from internationaloperators and culminating in the sale toShell, one of the largest groupsworldwide. The deal has enabled Repsolto shore up its balance sheet and financialposition, moving forward with itsobjective of boosting its ratings, whilecutting the company's net debt by morethan half (excluding Gas Natural Fenosa)to €2,200 million.

Strengths

End-to-end positionin global LNG supplychain

Access to Atlantic andPacific basins

Profitable LNG supplycontracts

Liquefied Natural Gas LNG

Highlights

Principales activos de GNL en el mundo

LNG activities include the liquefaction,transportation, marketing, and regasification ofliquefied natural gas, in addition to electricitygeneration activities in Spain at the BBE plant(Bahía de Bizkaia Electricidad) and natural gasmarketing in North America.

Following the Fukushima accident in March 2011and the subsequent nuclear crisis, there has beenincreased demand for LNG in the Pacific Basin.This brought about a steady increase in prices inthe Far East, which reached figures of up to $17and $18 per million Btu in second quarter 2012,and caused a significant de-coupling withEuropean pricing points [NBP (National BalancingPoint) at around $9 per million Btu], and evenmore so with the Henry Hub, which remainedunchanged at around $3 per million Btu.

The market was also characterized by low fleetavailability, coupled with high spot fleet pricesstemming from the longer travel times caused bythe rerouting of large amounts of LNG from theAtlantic Basin to the Pacific on account of the pricede-coupling and slump in demand throughoutEurope.

In Spain, the most noteworthy event was thedecline in gas consumption by 2.8% against theprevious year and the consequent drop in LNGimports. The main factors affecting this marketwere economic activity, weather conditions andcompetition from other energy sources.

As for the power generation market, the arithmeticmean of the Spanish electrical pool was €47.26 perMWh in 2012, down 5% on 2011. Gross electricity

demand on the Iberian Peninsula during 2012 was252.19 GWh, 1.2% less than the previous year.


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Operating income from LNG operations totaled€535 million in 2012, in comparison to the €386million at December 31, 2011, owing chiefly togreater LNG margins over the year.


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2012 marked the second full year of operation ofthe Peru LNG liquefaction plant, located at PampaMelchorita, in which Repsol holds a 20% interest.The Camisea consortium, in which Repsol alsoowns a 10% stake, supplies natural gas to theplant.

Operations control room inTrinidad and Tobago

The facility, with a nominal capacity of 4.4 MMt/y,processes 17 Mm3 of gas per day. It boasts the twolargest storage tanks in Peru (each with a capacityof 130,000 m3) and a sea terminal over onekilometer long to receive ships with capacitiesranging from 90,000 to 173,000 m3.

Additionally, the project envisages that Repsol willbe the exclusive marketer of the liquefaction plant'sentire production. The gas purchase agreemententered into with Peru LNG will run for 18 yearsfrom the start of commercial operations and is, interms of volume, the largest LNG acquisition evermade by Repsol.

Sea terminal at the LNGliquefaction plant in Peru, inwhich Repsol has a 20%stake

In September 2007, Repsol was awarded acontract under an international tender organizedby the Federal Electricity Commission (CFE) for thesupply of LNG to the natural gas terminal in theport of Manzanillo on Mexico's Pacific coast. Thecontract envisages the supply of over 67 Bm3 ofLNG to the Mexican plant over a fifteen-yearperiod. The Manzanillo plant, which will supplygas to the CFE power plants in mid-west Mexico,will receive gas from the Peru LNG plant, andentered into service in 2012.

The Peru LNG plant produced 5.2 Bm3 (3.8MMt/y) in 2012.

June 2009 witnessed start-up of production at theCanaport LNG regasification plant, a Repsol (75%)and Irving Oil (25%) partnership, and the firstLNG regasification plant on Canada's easterncoastline. Located in Saint John (New Brunswick)and with an initial send-out capacity of 10Bm3/year (1 Bcf/d), the Canaport terminal is oneof the largest in North America and suppliesmarkets on the eastern coast of Canada and thenorth-eastern United States. Repsol, the plant


Assets and projects

operator, supplies the LNG that fuels the terminaland is entitled to the entire regasification capacity.The third tank, which started operations in May2010, is able to receive loads from the largest LNGcarriers currently being used.

25.4% of Repsol's reservesare in Trinidad and Tobago

A multi-year LNG supply agreement was signed in2010 with Qatargas for the Canaport LNG plant.This agreement bolsters Repsol's status as areliable, diversified and flexible natural gasprovider for the Canadian and north-easternAmerican markets.

Noteworthy events for 2012 included loweravailability of LNG, increased activity in natural gastrading (more than twice that seen in 2011), andthe start-up of a project to enable the CanaportLNG plant to adapt to gas market needs,scheduled for completion in 2013. Growth innatural gas marketing activities in North Americais also expected to continue.

Repsol is involved in the Trinidad and Tobagointegrated LNG project, in which it holds aninterest in the Atlantic LNG liquefaction plantalongside BP, BG and others. The plant's strategicgeographical position allows it to supply theAtlantic Basin markets (Europe, United States andCaribbean) under prime economic conditions and,in the future, the Asian market through theexpansion of the Panama Canal, scheduled toopen in 2014.

This plant has four liquefaction trains with acombined capacity of 15 MMt/y. Repsol holds a20% stake in train 1, a 25% stake in trains 2 and 3,and 22.22% in train 4 (the latter being one of thelargest in the world, with a production capacity of5 MMt/y). In addition to its interests in theliquefaction trains, Repsol plays a leading role inthe supply of gas and is one of the mainpurchasers of LNG.

In Spain, Repsol holds a 25% interest in thecompany Bahía de Bizkaia Electricidad (BBE),which owns a combined cycle power plant with800 MWe of installed capacity. Power generated atthe plant is fed to the grid for residential,commercial, and industrial consumption. Thisfacility, which is located in the port of Bilbao,recovered high availability levels in 2012 afterbeing affected by the repair and subsequentreplacement of a turbine casing in 2011, despitewhich it continued to sell surplus gas withoutharming the company financially.

In December 2007, Repsol and Gas Natural SDGsigned a shareholders agreement with SonangolGas Natural (Sonagas) with the aim of startingwork on developing an integrated gas project inAngola. This initiative involves the appraisal of gasreserves to determine the investments that wouldbe required for their development and export inthe form of liquefied natural gas.

Moreover, drilling on the Garoupa-2 and GaroupaNorth wells was completed in 2011. The wells arecurrently under appraisal and the ongoing workwill eventually verify the consortium's projectedgas resources for the field.


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The Repsol-Gas Natural LNG 50-50% joint venture(Stream) is one of the leading LNG marketing andtransport companies in the world and one of themost important operators in the Atlantic Basin.One of this company's objectives is to optimizethe short- and medium-term management of bothpartners' fleets, which include 15 gas carriers anda variety of other vessels.

In 2012, Repsol, with management support fromStream, marketed 10.2 Bm3 of LNG, down 7% onthe same figure for 2011. Most of the gasemanated from Peru LNG, which was started upin June 2010, and from Trinidad and Tobago. Themain destinations for the cargo were Spain, theAsian market and Canaport LNG, with salesmaterializing in both the Atlantic (Europe andAmerica) and Pacific basins.

At year-end 2012, Repsol's gas carrier fleetcomprised seven solely-owned LNG carriers and afurther two jointly owned (50%) with Gas NaturalFenosa, all of them under time charter agreementsand with a total capacity of 1,248,630 m3. Four ofthese LNG carriers were added during 2010,linked to the start-up of the Peru LNG project: onefrom Naviera Elcano and three more from KnutsenOAS.

Additionally, Repsol has entered into short tomedium-term gas carrier leases, depending on themarket and fleet management conditions.


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The LNG business area invested €35 million in2012, compared to €18 million for 2011. Thisamount was used mainly for maintenance anddevelopment projects.

On February 26, 2013, Repsol signed anagreement with Shell for the sale of its LNG assetsand businesses (excluding the LNG businesses inNorth America and the Angola project).




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Highlights Results Refining Marketing LPG Chemical Newenergy


In 2012 - the first full year of operations atthe expansions of the Cartagena andBilbao refineries - the Downstreamdivision started to generate returns on theincreased competitiveness of its refiningassets. The company boasted the highestintegrated margins in the European sectorthroughout the cycle. Progress was alsomade divesting non-strategic assets orthose offering low returns.

Strengths

Increased distillation

capacity and

conversion capacity of

the refining system

Maximized

production of

medium distillates

Higher energy

efficiency and safety

while reducing

environmental impact

One of the best and

most efficient refining

Downstream

Highlights

setups in Europe +

operating excellence:

end-to-end refining

system that operates

as a single refinery

Efficient integration of

refining, chemical and

marketing businesses

The Repsol Group's Downstream division coversthe supply and trading of crude oil and otherproducts, oil refining, marketing of oil productsand LPG, and the production and marketing ofchemicals.

Petronor refinery is one ofthe best in Europe


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Operating income in the Downstream divisioncame in at €1,013 million, down on the €1,182million reported in 2011. 2012 was marked by thelaunch of the expansions at the upgradedCartagena and Bilbao refineries, allowingimprovements in refining margins by increasingand optimizing production.

However, results fell year on year due to the impacton inventories of evolving prices of crude oil andoil products, lower sales volumes in commercialdivisions as a result of the economic crisis and thefall in margins and sales volumes in the chemicaldivision owing to the more challenginginternational environment.

Operating income

Downstream

Results

2011 2012 Variation 2012/2011

Europe 1,012 723 (29%)

Rest of the world 170 290 71%

TOTAL 1,182 1,013 (14%)


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The Repsol Group owns and operates fiverefineries in Spain (Cartagena, A Coruña, Petronor,Puertollano and Tarragona), with a combineddistillation capacity of 896,000 barrels of oil per day(including, in the case of the Tarragona refinery,the share in Asfaltos Españoles S.A.). Installedcapacity at La Pampilla refinery (Peru), in whichRepsol holds a 51.03% stake and is the operator, is102,000 barrels of oil per day.

Activity and enviromentActivity and enviromentActivity and enviromentActivity and enviroment

Refining activity and context The year was marked,as in previous years, by the effects of theinternational economic crisis. Demand forpetroleum products declined across OECDcountries, affecting the refining business,especially in Europe, where refining marginsremained low. 2012 witnessed the closure of yetmore refineries and this restructuring within thesector is expected to continue over the comingyears across both Europe and the United States,with the closure of less advanced and lesscompetitive refineries. These closures will bringsupply into line with demand, and will foreseeablyallow margins to rally, especially at refineriesgeared towards producing medium distillates andwith capacity to process heavy crude oil products.In any case, and according to the findings of theInternational Energy Agency, this increase indemand will largely materialize in emerging

Downstream

Refining

countries, headed by China and India.

The refining margin in Spain stood at $5.3 perbarrel in 2012, up on the same figure for 2011($1.6 per barrel). In Peru, the annual refiningmargin came in at $3.9 per barrel, in comparisonto the $1.8 per barrel seen in 2011.

In this context, Repsol refineries processed 37MMt of crude oil, representing an increase of17.4% compared to 2011, due in part to increasedcapacity at the Cartagena refinery. On average,74% of refining capacity in Spain was employed;higher than the 71% recorded in the precedingyear. In Peru, refinery use was also up on 2011,rising from 69% to 70% in 2012.

The last quarter of 2011 saw the commissioning ofthe expansion and upgrade works at the Cartagena(C10) and Bilbao (URF) refineries. Operations atthe new units were consolidated during the courseof 2012, and in the second half of the year refiningmargins were improved in line with expectations.

Following successful completion of these projects,Repsol has met the objectives initially set out in itsinvestment strategy:

Increasing the distillation and conversioncapacity of the refining system so as tomaximize production of medium distillatesgiven the current shortage, cutting down onfuel oil production processing heavier crudeoils.

Improving energy efficiency and safety whilereducing environmental impact.

Positioning Repsol's refining model as one ofthe best and most efficient.

The C10 project has enabled the company to boostproduction capacity at the Cartagena complex to11 MMt (220,000 barrels per day). Now gearedtowards the production of medium distillates -over 50% - and with capacity to process heavycrude oils with greater added value, the upgradedrefinery will help improve the balance of trade inSpain by reducing the country's reliance onimports of automotive fuels. It is in fact the mostambitious industrial project in Spain's history, andone that has generated wealth during theconstruction stage (€3,100 million in approximateinvestment, involvement of over 20,000 people,average employment of 3,000 workers over threeyears) and will continue to do so once it becomesoperational (1,600 direct jobs and more than8,000 indirect jobs). With the project nowcompleted, the Cartagena refinery has become amodern facility and one of the most efficient inEurope in terms of energy use and environmentalimpact.

Source of processed crude

Thanks to the URF project, conversion capacity atthe Bilbao refinery has increased significantly, withthe plant now processing heavy crude oils andmaximizing the production of medium distillates.

Both projects were completed with excellent safetyratios, on schedule and within the approvedbudget.

Both Cartagena and Bilbao form part of Repsol'sdrive to adapt its facilities to the production ofclean transport fuels; encouraging the use ofbiofuels (biodiesel) and improving energyefficiency, security and environmental protection.

Refining capacity (1)

Production by main products

In 2012, progress was made in the engineeringand construction phases of a new production plantfor next-generation lubricant base oils; a jointfacility with the Korean company SKL. OnNovember 27, the first stone of the plant was laid

2011 2012

Middle East 28% 17%

North Africa 6% 13%

West Africa 9% 6%

Latin America 26% 40%

Europe 31% 24%

Total 100% 100%

Primary distillation Conversion ratio (2) Lubricants

(kb/d) (%) (kt/y)

SpainSpainSpainSpain

Cartagena 220 76 155

A Coruña 120 66 -

Puertollano 150 66 110

Tarragona 186 44 -

Bilbao 220 63 -

TOTAL REPSOL (SPAIN) 896 63 265

PeruPeruPeruPeru

La Pampilla 102 24 -

TOTAL REPSOL 998 59 265

kt 2011 2012

Refinery intakeRefinery intakeRefinery intakeRefinery intake (3 )(3 )(3 )(3 )

Crude oil 31,483 36,960

Other refinery intake 9,053 8,213

TOTAL 40,536 45,173

Refining productionRefining productionRefining productionRefining production

Intermediate distillates 17,835 21,863

Gasoline 8,145 7,165

Fuel oil 6,287 4,474

LPG 1,056 961

Asphalts(4) 1,272 970

Lubricants 242 184

Other (except petrochemicals) 2,858 5,827

Total 37,695 41,444

at a ceremony attended by local and regionalauthorities and the senior management of thecompany's two partners.

The plant, lying adjacent to the Cartagena refinery,will require an estimated investment of €250million and its launch is scheduled for 2014. TheTarragona and Cartagena refineries will provide theraw materials for the plant.

The base oils produced are needed in themanufacture of lubricants for Euro IV/V engines,and involve a major reduction in emissions andconsumption.

At year-end 2012, as part of the Repsol Group'splan to integrate differently-abled people, 86 suchpeople belonged to the workforce at its industrialcomplexes and offices in Spain.

(1) Information disclosed in accordance with Repsol Group's consolidation policy: all

refineries mentioned are fully consolidated in the group's financial statements. The

reported capacity in Tarragona includes the shareholding in Asfaltos Españoles, S.A.

(ASESA).

(2) Defined as the ratio between the equivalent capacity factor of Fluid Catalytic Cracking (

FCC) and primary distillation capacity.

(3) Information disclosed in accordance with Repsol Group's consolidation policy: all

refineries mentioned are fully consolidated in the group's financial statements.

(4) Includes 50% of Asfaltos Españoles S.A. (ASESA) asphalt production, in which Repsol

and Cepsa own 50% shares. Repsol markets 50% of ASESA's products.


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Repsol markets its range of products through anextensive network of service stations. In addition,marketing activity includes other sales channelsand the marketing of a wide range of products,such as lube oils, bitumen, coke, and derivatives.

Total marketing sales closed at 21,416 Kt, down4.5% on the previous year. This drop was due toshrinking demand; particularly evident in Spain.The declines in domestic consumption were offsetby international growth and new businessopportunities.

In this regard, we would underscore the openingof new product marketing lines abroad, themaintenance of gasoline and diesel market sharesin Spain, and Repsol's improved position inPortugal.

In this complex environment, managing salesmargins and credit risk accordingly allowedpositive results to be obtained both in the servicestations channel and in direct sales to the endconsumer.

At year-end 2012, Repsol had a network of 4,549service stations in countries where theDownstream division operates. In Spain, thenetwork comprised 3,615 points of sale, 70% ofwhich had a strong concessionary link to thenetwork while 30% were company-operated.Service stations in other countries were spreadthroughout Portugal (427), Italy (174) and Peru(333).

Service stations and supply units

Growth and consolidationGrowth and consolidationGrowth and consolidationGrowth and consolidation

The company maintains its partnerships policy

Downstream

Marketing

Countries Controladas por Repsol Abanderadas (1) Total

Spain 2,522 1,093 3,615

Portugal 2,522 1,093 3,615

Peru 116 217 333

Italy 53 121 174

TOTAL 2,955 1,594 4,549

with market leaders such as El Corte Inglés, with ajoint promotional campaign offering discountvouchers for purchases of over a certain amount atboth Repsol service stations and El Corte Inglés'own chain of stores. Repsol has also strengthenedits strategic alliance with Burger King and hasadvanced implementation of Auto King outletsacross its service station network in Spain.

Repsol has 3,615 servicestations in Spain

As a company committed to technologicalinnovation, Repsol, along with la Caixa, hassupported the implementation of a newcontactless payment system that will be thequickest on the market, allowing customers to payremotely and very useful in busy outlets such asservice stations. Repsol is the first Ibex 35company to use this technology. Furthermore, in2012 the "Repsol Mas" loyalty card also launched,applying instant discounts on transactions atservice stations.

Commitment to

society

True to its social

commitments, in

2012 Repsol

consolidated the

employment and

integration of

differently-abled

people and made

progress with its

commitment to

sustainability,

respect for the

environment and

personal safety;

renewing the

Repsol Bio Telex 46

lubricant line, which

received the

European Eco-label

distinction. The

company also

developed other

environmentally-

friendly products at

the Repsol

Technology Center,

including Bio

Repsol Telex 68 oil

and green asphalts.Read more

Repsol became the leading European producerand marketer of green coke, increasing itspresence in this business and tripling salesvolumes despite the difficult market situation. Atpresent, the group is involved in a process ofinternational expansion, mainly in theMediterranean and North Africa.

In line with this growth and consolidation plan,Servicios Logísticos de Combustibles de Aviación(SLCA), in which Repsol holds a 50% interest, hasstarted in-plane refueling operations at Spain's twomain airports: Madrid-Barajas and Barcelona-ElPrat.

As a result, SLCA has become the second largestoperator in Spain by number of airports andbusiness volume. In the current economicenvironment, it is noteworthy that 100 new staffwere recruited in this area.

Following the company's strategic policy toconsolidate its market position in Portugal, theBoa Nova and Sines logistics projects werelaunched, enabling Repsol to achieve a bettersupply foothold in the country.

Confirming the growth and consolidation strategy,over 60% of specialized sales are made in theinternational market through operations in over100 countries and with 40 international lubricantdistributors. Highlights include the signing of anagreement to manufacture lubricants for Russia,and start of construction of the third-generationbase lubricant plant at Cartagena.

(1) Service stations owned by third-party dealers with whom Repsol has entered into a new

licensing agreement. In the EU, the maximum term of these agreements is five years.


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Repsol is one of the leading retail distributors ofLPG in the world, ranking first in Spain and Peru,and maintaining top positions in Portugal andEcuador. In 2012, the company operated in sevendifferent European and Latin American countries.

LPG plant in Peru, whereRepsol has a 29% marketshare

LPG sales in 2012 totaled 2,537 kt. Meanwhile,total sales in Spain slumped by 6% year on year,primarily due to lower retail sales of bottled linesand lower LPG consumption in the petrochemicalsector. Repsol distributes bottled, bulk, and pipedLPG in Spain through the collective distributionand Autogas networks, with over five million activecustomers. Bottled LPG sales accounted for 62%of total retail LPG sales in Spain in 2012, through anetwork of 225 distribution agencies.

In Spain, prices continue to be regulated for pipedLPG and LPG bottles of between 8 and 20 kg,excluding bottled mixtures for using LPG as fuel.The pricing system ordered for bottled gas by theMinistry of Industry, Trade and Tourism inSeptember 2009 (ITC 2608/2009) significantlyimpacted retail margins of this product up toOctober. According to this framework, 25% of theprice to be applied in a quarter is pegged to theinternational prices in the preceding quarter with atime difference of one month, while the remaining75% depends on the maximum price prevailing inthe concluding quarter.

Repsol sells bottled, bulk,piped and automotive LPGin Latin America

On June 19, the Spanish Supreme Court issued aruling (published in BOE [Official Gazette] of July20), partially upholding the appeal filed by the LPGOperators Association (AOGLP), and mostsignificantly, declaring the nullity of Order ITC2608/2009, in force on that date, on the updatingof regulated bottled LPG prices. The prices forfourth quarter 2012 published by the Ministry ofIndustry were calculated according to the previousMinisterial Order ITC 1858/2008.

In the BOE of December 31, 2012, RoyalDecree-Law 29/2012 of December 28 waspublished on improving management and socialprotection in the Special Scheme for DomesticWorkers and other economic and social measures.

Downstream

Liquefied petroleum gas - LPG

The aforementioned Royal Decree-Law providesthat from January 1, 2013, the maximum salesprice, before tax, of bottled LPG, as defined insection two of Order ITC/1858/2008 of June 26,will be the price defined in the Resolution ofSeptember 24, 2012 issued by the DirectorateGeneral for Energy Policy and Mines, publishingthe new maximum sale prices, before tax, ofbottled LPG, in bottles with a capacity equal to orgreater than 8 kg, but less than 20 kg, excludingbottled mixtures for using LPG as fuel, until thenext review scheduled for March 1, 2013, pursuantto the first final provision of that order.

Portugal and Latin AmericaPortugal and Latin AmericaPortugal and Latin AmericaPortugal and Latin America

In Portugal, Repsol distributes bottled, piped andbulk LPG and Autogas to end customers, whilealso supplying other operators. Sales in 2012reached 143,000 tons, making the company thethird largest operator with a 21% market share. In2012, it launched the product "Conta Gas 12" toprovide a new service to customers at a time ofeconomic crisis. This is a pioneering LPG productin Portugal that allows a segment of bulkcustomers to pay their bills in monthlyinstallments.

In Latin America, Repsol sells bottled, bulk, pipedand automotive LPG to the household,commercial and industrial markets with sales of1,123 kt.

AutoGas growsAutoGas growsAutoGas growsAutoGas grows

AutoGas market growing AutoGas (LPG for thetransport sector) is the most widely usedalternative fuel in the world, powering over 21million vehicles (eight million in Europe).Although it has yet to make any meaningful impacton the Spanish market, sales grew by 22% in 2012,indicating increased demand for this economicfuel, which also helps improve air quality withincities. The industry expects that roughly 200,000vehicles will be running on Autogas in Spain in fiveyears' time.

Repsol, fully aware of the growing interest in thisalternative fuel, had 375 points of sale equippedwith AutoGas pumps at year-end 2012, of whichover 160 are in Spain. Additionally, there arealready 280 supply points on customer premises.

In Peru, the Ministry of Energy and Minesintroduced the Energy Social Inclusion Fund(FISE) in July 2012 which, among other measures,provides for the distribution of discount vouchersworth 16 soles per 10-kilogram bottle of LPG,allowing the more impoverished sectors of societyto access and consume LPG, thus substitutingother sources such as kerosene and firewood. Thevoucher program began with a pilot scheme in theprovince of La Convención (Cusco).

In 2012, GLP Peru, with the support of the Repsol

Foundation, handed out around 9,000 cookers tohomes in Piura and plans to deliver another 7,500to households in Cajamarca, as part of the NINAproject to replace domestic consumption ofkerosene and firewood with LPG, introduced bythe Peruvian Ministry of Energy and Mines in2009.

In order to improve living conditions in emergencysituations such as those arising in the aftermath ofearthquakes and floods, Repsol has put togetheremergency aid kits. The Repsol Foundation hasdonated 1,000 kits to the Spanish MilitaryEmergency Unit (UME) for distribution to affectedpopulations when required in situations ofemergency.


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The chemicals division produces and markets awide variety of products, ranging from basicpetrochemicals to derivatives. Its products aremarketed in over 90 countries, leading the marketon the Iberian Peninsula.

Production is concentrated at three petrochemicalcomplexes located in Puertollano, Tarragona(Spain) and Sines (Portugal), where there is a highlevel of integration between basic and derivativechemicals, as well as with refining activities at theSpanish facilities.

Repsol also has a number of subsidiary andaffiliate companies through which the companyproduces styrene derivatives, chemical specialtiesand synthetic rubber at special plants. The latter isproduced through Dynasol, a 50% partnershipwith the Mexican KUO group, with plants inMexico and Spain and another one underconstruction in China with local partner ShanxiNorthern Xing'an Chemical Industry.

Weak demand, high levels of uncertaintyconcerning the growth of the economy and theinability to adapt prices to rising raw materialscosts impacted income for the year. However, theconsolidation of bold cost-cutting measures andproduction adjustments at the plants, along withthe optimization of integrated margins, helpedminimize losses in 2012.

Sales to third parties amounted to 2,308 MMt,down from 2,659 MMt in 2011.

The main efforts in 2012 focused on theimprovement and optimization of existing assets,driving efficiency, reducing costs and improvingquality, safety and environmental compatibilitystandards. Emphasis was also placed ondiversifying the investment portfolio.

In this regard, at the Puertollano Complex, afterthe conversion of an existing unit, a new unit forthe production of ethylene vinyl acetate (EVA)polymers was commissioned in 2012, leading toan increase in capacity of 15,000 tons ofdifferentiated products.

Downstream

Chemicals


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The New Energy business unit was created by theRepsol Group in 2010 to promote and generatereturns from the new initiatives pushing towards afuture where energy is more diversified andproduces lower carbon dioxide emissions.

The New Energydivision developswind farm, bioenergyand microalgaeprojects

The aim of this business unit is to identify newopportunities, promote projects and carry outinitiatives in fields such as bioenergy andrenewable types of energy applied to transport andother areas that could share synergies withRepsol's current businesses and the geographicregions in which it operates.

e-mobility

In 2012, Repsol

continued to

develop the electric

mobility business

through IBIL and

IBILEK. IBIL

extended the scope

of its business

throughout Spain

with the opening of

seven sales offices.

In addition, a

control center was

launched to

monitor and

management all

aspects of

infrastructure and

business, the first of

its kind in Spain.Read more

In 2012, the New Energy unit continued todevelop a number of projects initiated from theoutset and involving bioenergy development,microalgae research and wind farm promotionprojects.

In 2011, Repsol acquired 100% of Sea EnergyRenewables, later renamed Repsol NuevasEnergías U.K. - a British company based inScotland engaged in the promotion anddevelopment of offshore wind farms. Through thisdeal, Repsol acquired development rights for threeoffshore wind farms off the Scottish coast.

As part of this deal, Repsol reached an agreementwith EDP Renováveis for the joint development oftwo of these wind farms, namely the 1,500-MWMoray Firth wind farm and the 905-MW Inch Capefacility. Following the operation, Repsol owns 33%and 51% interests in these facilities, respectively.The company also holds a 25% stake in theBeatrice wind farm, with Scottish and SouthernRenewables owning the remaining 75%. Thanks tothe new deal, Repsol now holds rights to develop,construct and operate 1,190 MW of installedcapacity in the United Kingdom.

During 2012, Repsol executed the investment planfor these three projects on schedule andincorporated the capacities needed to ensure theirsuccessful completion. The main milestonesincluded the applications submitted for thedevelopment of both the Beatrice and the Moray

Downstream

New energy

Firth offshore wind farms. Additionally, workcontinues on filing the application for Inch Cape inthe first half of 2013.

During the first phase of the projects, to becompleted between 2014 and 2015, the necessarystudies will be conducted and steps taken toacquire the construction and operating permits forthe facilities, with commissioning expected to takeplace between 2015 and 2020. These projects willallow Repsol to apply its considerable technologicalexpertise in offshore operations, coupled with itsexperience in large-scale engineering projects.

Investments in innovative technologyInvestments in innovative technologyInvestments in innovative technologyInvestments in innovative technology

Investments in innovative technology In additionto managing the investments made in 2010 and2011, the New Energy division made the followinginvestments in 2012; all them through Repsol NewEnergy Ventures, S.A., a 100% subsidiary of theRepsol Group.

In June 2012, Repsol acquired 31% of thePortuguese company Windplus, which is engagedin the development and demonstration ofWindfloat technology based on semi-submersiblefloating platforms for the installation of offshorewind farms. Windplus already has a full-scaleprototype in operation off Portugal's northerncoast.

In October 2012, Repsol New Energy Ventures andInnvierte Economía Sostenible signed aninvestment commitment for €21 million to makejoint investments over the next five years in smalland medium-sized Spanish companies thatdevelop innovative technology initiatives in thesectors of bioenergy, renewable generation,e-mobility, energy storage and energy efficiency.

These investments, channeled through RepsolNew Energy Ventures in companies with a distincttechnological profile, will enable the company toparticipate in and foster the development ofinnovative technologies related to the lines ofbusiness of the New Energy division.

On January 16, 2013, Repsol New EnergyVentures, S.A. acquired 18% of the Dutchcompany Tocardo, BV, dedicated to developingpower generation technology for rivers and oceancurrents.


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Operating investments in the Downstreamdivision totaled €666 million, 61% down on the€1,704 million reported the previous year, duelargely to the fact that the major refining projectshave now been completed. Most of this amountwill be used for operating improvements atfacilities and to boost fuel quality, in addition tosafety and environmental protection.

In 2012, Repsol reached an agreement with aconsortium of Chilean investors, led by LarrainVial,for the sale of 100% of its subsidiary RepsolButano Chile for approximately $540 million.Repsol Butano Chile owned a 45% share of Lipigas(a company present in the Chilean and ColombianLPG markets), in addition to other financial assets.

The sale of these subsidiaries is a further step forRepsol in the implementation of its Strategic Plan,which envisions the selective divestment ofnon-strategic Downstream assets.

Downstream



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Repsol's 30% stake in Gas Natural Fenosagenerated operating income of €920 million in2012, up from the €887 million of 2011, despite alower contribution of capital gains from the sale ofassets year on year.

This positive trend is mainly explained bydiversification efforts and the increasingcontribution of international activities and theadded balance provided by the business profile ofGas Natural Fenosa, all of which offset the effecton income of the divestments carried out in 2011and stagnating results in the regulated electricitybusiness in Spain owing to the impact of RoyalDecree-Law 13/2012.

Key operating figures for the business aredescribed below. The figures shown are thosegenerated by Gas Natural Fenosa, even thoughRepsol's holding in the company is 30%.

Electrical demandwent down by 1.4%in Spain

Gas distributionGas distributionGas distributionGas distribution

Spain

Business in Spain includes compensated gasdistribution activity, ATR (third-party networkaccess services) and secondary transport, as wellas non-compensated distribution activities (rentalof gas meters, connections to customers, etc.).

Within the framework of the action plan approvedby the Spanish National Antitrust Commission(CNC) in relation to the Unión Fenosa acquisitionprocess, 304,456 natural gas supply points weresold on June 30, 2011 to the Madrileña Red deGas Group, representing consumption of 1,439GWh in the self-governing region of Madrid.

Sales from the regulated gas business in Spainamounted to 195,769 GWh in 2012, down 2.7%on the same figure for 2011.

Gas Natural Fenosa continued to expand itsdistribution network and number of supply points,although it should be noted that the figuresprovided were offset by the divestments made in2011. Reduced activity in the new constructionmarket continues to hamper any increase insupply points, although this is partially offset by agreater number of connections in the domesticproperty market.

Investments

Gas Natural Fenosa

Repsol's operating

investments over

the year in relation

to its stake in Gas

Natural Fenosa

amounted to €432

million, in

comparison to the

€582 million

reported in 2011,Read more

At year-end, the gas distribution network spanned46,541 kilometers, an increase of 6.1% year onyear, while the number of supply points came in at5,124,000, 1.5% higher than in 2011.

Latin America

Latin America This covers gas distribution activityin Argentina, Brazil, Colombia and Mexico. In2012, the number of gas distribution supply pointsreached 6,090,470 customers. Year-on-year growthrates remain high, showing an increase of 207,565supply points, with Colombia turning in aparticularly solid performance, where new supplypoints amounted to 111,159.

Sales from gas activity in Latin America (gas andthird-party network access services) totaled210,358 GWh, up 10.1% on the previous year'sfigure.

The gas distribution network has been extended bya further 1,503 kilometers over the course of 2012,reaching 67,334 kilometers at year-end andrepresenting growth of 2.3%.

Italy

Business in Italy includes rate-regulated gasactivities and sales.

Gas Natural Fenosa reached a total of 448,967supply points in the gas distribution business inItaly; up 2% on the same figure for 2011.

Gas distribution activity stood at 3,647 GWh, up1.9% year-on-year and primarily due to favorableweather conditions. The distribution network wasextended by 149 kilometers to reach 6,885kilometers at the close of the year.

Power distributionPower distributionPower distributionPower distribution

Spain

This business includes regulated powerdistribution activity and customer networkservices: mainly connection and link-up rights,metering, and other services associated withthird-party access to the company's distributionnetwork. Electricity supply points experienced mildgrowth of 0.6% in 2012 to reach 3,772,495.

In 2012, power effectively supplied remained atsimilar levels to those seen in 2011, reaching33,763 GWh, despite the fact that overall electricitydemand dropped by 1.7% in line with thenationwide trend.

Latin America

Latin America Business here encompassesregulated power distribution in Colombia,Nicaragua and Panama.

Following its divestment, as of June 1, 2011, theelectricity distribution business in Guatemala is no

longer consolidated in the results.

Sales by the power distribution business in LatinAmerica represented 18,074 GWh, marking anincrease of 2.1%, despite the inclusion in theprevious year of sales from distributors inGuatemala that were sold in June 2011. Thenumber of supply points showed an increase of3.8%, reaching 3,700,934.

Moldova

Business in Moldova involves regulated powerdistribution at tariff in the capital and metropolitanarea and in the country's central and southernregions. Gas Natural Fenosa distribution inMoldova accounts for 70% of the country's total.

Energy delivered climbed by 3.3% while supplypoints, which totaled 836,000, also experiencedyear-on-year growth. Sales from the electricitydistribution business stood at 2,525 GWh.

The management streamlining plan beingdeployed in Moldova is enabling objectives to bemet while improving basic operating figures.

ElectricidadElectricidadElectricidadElectricidad

Electricity

The electricity business in Spain includes powergeneration activities, the wholesale and retailmarketing of electricity in the deregulated Spanishmarket, the supply of electricity at the tariff of lastresort and electricity trading in wholesale markets.

In 2012, national electricity demand stood at251,749 GWh, which represents an annualdecrease of 1.4% on the previous year. Aftercorrecting this percentage for the effects of thenumber of working days and temperatures, theactual drop in demand was 1.8% for the year.

Gas Natural Fenosa power generation throughoutthe Iberian Peninsula amounted to 37,144 GWh in2012. Of this amount, 34,425 GWh came fromordinary system generation, and 2,719 GWh fromspecial system generation (CHP and renewableenergy). This represents a year-on-year slump of2.5% as a whole, broken down as 3.6% under theordinary system chiefly due to divestments andreduced hydroelectric output, and 14.2% underthe special system. Gas Natural Fenosa'saccumulated share in ordinary system generationat December 31, 2012 was 20.7%, the same as forthe previous year.

Hydroelectric production in 2012 totaled 1,665GWh, marking a year-on-year drop of 42.4% due toa very dry year from a hydrological standpoint. Thegeneration of electricity using combined cyclesources in 2012 reached 20,602 GWh, 14% lowerthan the previous year due to divestments incombined cycles.

Nuclear production increased slightly comparedwith 2011. The upshot for Gas Natural Fenosa ofthe enactment of the Royal Decree on theGuarantee of Supply is that the national coal-firedplants affected by the new law are operatingnon-stop with production levels of 7,724 GWh, incomparison to the 4,464 GWh generated in 2011.

Sales from the electricity marketing business camein at 35,910 GWh.

Latin America

This section relates to power generation assets inMexico, Puerto Rico, Panama and the DominicanRepublic.

Power generated in Latin America stood at 18,188GWh in 2012, higher than the previous year, andwith Mexico and Puerto Rico being the maincontributors.

Kenya

This section includes power generation in theAfrican country. In 2012, Kenya's fuel-based powergeneration reached 646 GWh; down 15.8% from2011 owing to lower demand for thermal power inthe country due to higher rainfall during the yearand, consequently, increased reservoir levels.

InfrastructureInfrastructureInfrastructureInfrastructure

This business includes the development ofintegrated LNG projects; oil and gas exploration,development, production and storage; seatransport management, and operation of theMaghreb-Europe gas pipeline.

Gas transportation activity carried out in Moroccothrough the companies EMPL and Metragazrepresented a total volume of 116,347 GWh, up4% on the previous year. Of this figure, 79,475GWh were transported to Gas Natural Fenosathrough the company Sagane, while 36,872 GWhwere earmarked for Portugal and Morocco,representing growth of 17.9%.

In relation to exploration and production activities,the Villaviciosa exploration license will beabandoned, geological and geophysical surveyshave been performed in the Bages area(Barcelona), and progress continues withprocessing applications for five projects in theGuadalquivir Valley area.

Supply and marketingSupply and marketingSupply and marketingSupply and marketing

This business area is engaged in the supply andmarketing of gas (wholesale and retail) both inSpain and abroad, and of other products andservices related to retail marketing and alsomarketing of gas at the tariff of last resort in Spain.

Gas Natural Fenosa's supply and marketing in theSpanish gas market reached 238,451 GWh,

representing an increase of 0.7% on the previousyear, chiefly due to increased sales to endcustomers, which increased by 5.3%, while supplyto third parties in the Spanish market fell by 11%.

Supplies to the international market climbednoticeably to reach 89,607 GWh, marking anincrease of 24.9%.

Unión Fenosa GasUnión Fenosa GasUnión Fenosa GasUnión Fenosa Gas

This business embraces the gas supply andmarketing activities carried out by Unión FenosaGas, including the liquefaction infrastructure inDamietta (Egypt), regasification infrastructure inSagunto (Spain), and management of theshipping fleet.

Gas supplied to the Spanish market reached55,683 GWh, representing a year-on-year drop of2.2%. In addition, 28,200 GWh of energy washandled through international sales transactionsin various markets.


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People >People: A diverse and committed team, made up of over 80nationalities who have incalculable value: talent.

Technology >Technology: The focus on innovation as a driver of change tocreate a new energy efficient and sustainable model.

Safety >Safety: Safety is one of Repsol's fundamental and inalienableethical values, which guides all our actions andcommitments.

Environmental protection >Environmental protection: The incorporation ofenvironmental criteria in Repsol's activities, allows us to bemore responsible with the environment.

Corporate Responsibility >Corporate Responsibility: Repsol is an energy company thatcontributes to the sustainable development of society.

Communication >Communication: Transparent communication is a keyelement in our relationship with society and interest groups.

Intangible Asset Management >Intangible Asset Management: Our vision involves thecommitment to improving people's welfare and bringsforward the building of a better future through smart energy.

Sports sponsorship >Sports sponsorship: Once again Repsol takes centre stage atthe Motorcycle World Championship with a winning formula:innovation and talent.

Repsol Foundation >Fundación Repsol: Our commitment to social responsibilityis expressed in the commitment to the sustainedimprovement of society.

Corporate Areas


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Workforce Work-lifebalance

Inclusion andequality

Attraction andmanagement of talent

Training anddevelopment

Labourmanagement

At year-end 2012, Repsol had a consolidatedworkforce of 29,985 people representing over 80different nationalities. Of this figure, a total of23,995 employees across 35 countries wereworking at companies under the direct control ofRepsol. All information presented in this sectionrefers to these employees.

In 2012, a new organizational structure wasapproved, leading to changes both at senior levelsand other organizational levels of the company'sdifferent departments. These changes areintended to reinforce the existing model, favoringthe development of internal talent and providingnew career opportunities for Repsol employees.These changes notably included the hiring of 33people for the management team in 2012 and theannouncement of numerous reshuffles in differentbusinesses and corporate areas.

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Labourmanagement

The diversity of Repsol's professionals constitutesa competitive advantage for the company. TheDiversity and Balance Committee has continued topromote programs initiated in previous years:telecommuting, recruiting differently-abled people,flexible working hours, efficient time managementand cultural diversity.

Throughout 2012, the telecommuting scheme -one of the most highly-valued work-life balanceinitiatives among employees - was extended toindustrial complexes and sales offices throughoutSpain, while telecommuting pilot projects werelaunched in Peru involving 26 employees, and inEcuador with 10 employees.

At year-end, more than a thousand peopleworldwide had signed up to the scheme,representing an annual increase of 45% anddemonstrating positive progress towards acorporate culture based on commitment, efficiencyand reaching targets.

In 2012, the White Paper on Homeworking waspresented and published, summarizing Repsol'sexperience as a pioneer in the industrial field.

In 2012, the White Paper on Homeworking waspresented and published, summarizing Repsol'sexperience as a pioneer in the industrial field.

Progress and

new measures

Repsol introduced

special leave for

employees to care of

their children if

these are minors

and suffer from

serious illness

requiring long-term

hospitalization.Read more

Recognition outside the company

The company's different diversity and

work-life balance programs have been

externally recognized with prestigious awards,

including:Read more

People

Diversity and work-life balance


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Labourmanagement

In 2012, the company reached the figure of 547differently-abled people directly recruitedworldwide (437 in Spain, 17 in Portugal, 39 inPeru, 38 in Ecuador, 10 in Venezuela and six inBrazil) with an additional 170 people hired underother systems in Spain. These employees areintegrated into all areas of the organization and22% of them occupy qualified technical positions.In 2012, significant efforts were made toencourage the hiring of disabled people in theindustrial area and awareness-raising campaignshave continued.

In terms of cultural diversity, a study wasperformed to understand the perceptions ofemployees and identify potential cultural barriersand success stories, while defining a managementmodel that capitalizes on the cultural richness ofRepsol as a competitive advantage. The studypolled 4,916 employees worldwide through anonline survey, supplemented with 27 focus groupsand 39 personal interviews.

Employee lectures were also scheduled to raiseawareness about the cultural differences ofcountries in which the company is strengtheningits presence, such as China, South Korea, Brazil,Angola, Algeria and Russia.

Repsol has partnerships and agreements in placewith different organizations which advise thecompany in a number of areas. In Spain, theseinclude the Framework Cooperation Agreementbetween Repsol, ONCE and their respectivefoundations, with action geared towardsdeveloping and enhancing the social integration ofpeople with disabilities.

In 2012, a cooperation agreement was signed withthe Fundación Inteligencia y Sociedad (Intelligenceand Society Foundation) in order to facilitate theincorporation into the company of people withsocial integration difficulties stemming from theirhigh IQ levels. In July 2012, the company alsojoined an initiative to raise awareness of genderviolence launched by the Spanish Ministry ofHealth, Social Services and Equality.

People

Equal opportunities

In the area of gender equality, Repsol is one of thecompanies to have been recognized with theCorporate Equality Label, promoted by the Spanishgovernment. This distinction is awarded tocompanies whose equal treatment andopportunities policies for workers deserve specialrecognition.

Also in 2012, a collaboration agreement wassigned with the Fundación Activos de GranExperiencia (AGE) (Highly Experienced AssetsFoundation), in order to improve agemanagement policies in the organization.

Cultural changeCultural changeCultural changeCultural change

The process of cultural change deployed by theRepsol Group implies an evolution in workingmethods and people management, alwaysdrawing on the two basic strengths of Repsol'scorporate culture: respect and a sense of foresight.

One of the highlights of 2012 was identifying anddescribing the company's values, which aredefined as: flexibility, transparency, innovation,integrity and accountability.

Campus is one of the projects that has madeRepsol's values tangible. The new headquarters isa spatial and architectural opportunity, and also anopportunity to work in a different way, highlightingwhat Repsol means as a company. In fact, thearchitectural space has paved the way forinitiatives that revolve around people, such asflexible hours, the paperless office or theintroduction of advanced telecommuting posts, allof which contribute to a new work organizationpolicy.


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Labourmanagement

Repsol offers different ways to recruit, motivateand engage talented individuals, helping them todevelop personally and professionally, with a goodworking environment, skills training, internalpromotion opportunities and job mobility.

The company has also rolled out programs tocapture young talent and provide this talent withprofessional training before they join the team. In2012, 140 new professionals joined one of threeMaster's courses offered by Repsol (HydrocarbonExploration and Production, Refining,Petrochemicals and Gas, and EnergyManagement; the latter with two courses in 2012).

To recruit this talent, the company took part inover 10 forums and job fairs (many of them inindustrial environments), and gave talks andpresentations at a number of schools, colleges,universities and associations.

Repsol has adapted to the needs of the newEuropean Curriculum of the Bologna Accords,offering university students internships. Trainingfor university students in different areas of thecompany was reinforced with the signing of morethan 300 internship agreements in 2012.

Within the different training profiles employedthroughout the company, vocational traininginternships have also been provided for more than60 students receiving intermediate and higherlevel vocational training, with a high percentage ofthese joining Repsol.

Training: 9.301

The content of the Careers Channel at repsol.comwas updated and new videos of employees wereincluded. According to market trends and theneeds of the company, and with the KWDWebranking as a benchmark, a full review of the

People

Recruiting the best talent

People Attendances Hours

Spain 12,191 54,499 696,470

Rest of the world 5,931 39,569 312,502

Total 18,122 94,068 1,008,973

careers area has begun, using this opportunity forimprovement to change our focus and reach thetarget audience.

Talent managementTalent managementTalent managementTalent management

Throughout 2012, Repsol's talent managementmodel was conceptualized, identifying andupdating the company's evaluation anddevelopment tools.

The ever increasing internationalization of thecompany makes it necessary to support thebusiness areas and corporate areas. A result of thisis an initiative launched in the engineeringdivision in 2012 to identify the capacity of people(193 interviews were conducted) to provideUpstream services internationally, and the actionsthat would be needed to strengthen and adaptindividual profiles to existing demands.

Another focal point in 2012 was to continueworking on developing management style throughtraining on behavior and techniques for evaluatingstaff and generating feedback. A total of 610managers attended these training workshops.

Work also continued to consolidate the tools usedto assess and develop the talent of employees,such as People Review, which provides a detailedassessment of people, generating a shared visionof each of them: their strengths, areas ofimprovement and professional profile. Theseassessments pave the way for development plansand other specific actions, and allow for bettermobility throughout the company. In 2012, 2,307people were assessed at 52 People Reviewsessions, with 193 of the people assessed holdingexecutive positions.

Fourteen Developments Centers were staged (levelof development assessed through individual andgroup tests): 10 in Spain and 4 in other countries,with a total of 112 people assessed.

The Assessment-Feedback scheme continued to beimplemented in 2012 to see what perceptionsuperiors, team members, peers and internalclients have of the subject's conduct andperformance. This scheme started life as a pilotinitiative for the managers of the service stationnetwork in Spain. Under this program, 140managers were assessed in 2012 and 827 peopletook part.

In 2012, the quality and distribution of technicalknowledge in the Upstream area was diagnosedthrough an assessment of technical skills or criticalknowledge in which a total of 1,277 people wereassessed.

Since January 2012, 3,330 work migrations and1,996 changes of job classification have beencarried out.


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HR and transparency

During 2012, work continued on integrating theUnited Nations "Protect, Respect and Remedy"framework and the guiding principles forcompanies and human rights. In this sense,Repsol prepared its draft Policy on Human Rights,which has been submitted to externalorganizations for their comments. The companyhas set a goal of adopting this policy in 2013. Ahuman rights course was also given to all Repsolemployees to explain this commitment, theunderlying framework and how it is beingimplemented. The course began with a pilot teststaged for more than 400 company employees,and will be extended to other areas and businessesin forthcoming years.

The company is afounding partner ofthe ExtractiveIndustryTransparencyInitiative

Repsol believes that the appropriate managementof revenues from extractive activities, wherever itoperates, should have a positive impact on localeconomies. For this reason, the company is afounding partner of the Extractive IndustryTransparency Initiative, which promotes thetransparency of financial reports among extractiveindustry companies (mining, oil and gas) to avoidcorruption, social injustice and conflicts.

For yet another year, the company's performancein terms of corporate responsibility wasrecognized, with the company continuing to beranked on the following prestigious sustainabilityindexes: FTSE4Good, Ethibel Sustainability andDow Jones Sustainability. In this last instance andfor the second consecutive year, Repsol achievedthe maximum rating, becoming the industryleader. Thanks to all this, the company again


Human rights and transparency

received the "Gold Class" company rating from theSustainability Yearbook 2012, which recognizescompanies with the best sustainabilityperformance.

Repsol's presence in international sustainabilityindexes is proof of its strong commitment toethical, environmental and social values as part ofits corporate culture. In turn, it is recognition ofthe company's commitment to transparency andcorporate responsibility.

In 2012, Repsol, the Repsol Foundation and theAyuda en Acción (Action Aid) Foundation signed acollaboration agreement. One of the envisagedactions is for the service station network in Spainto sell fair trade products supplied by Ayuda enAcción. This joint initiative will also be anopportunity to share acquired knowledge andexperience on the reality of the communities andenvironments in which the company operates, andthus define cooperation projects that will generatebenefits for these communities.


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Labourmanagement

One highlight of 2012 was the launch of theRepsol Master's in Energy Management (REGE)for new professionals set to join variousmanagement positions. This course providesactive training on the value chain at Repsol andthe context in which it operates. With regard toin-service training, efforts focused in 2012 onsimplifying and integrating the training offer undera homogeneous and company-wide architecture.

A total of 652employees are oninternationalassignment

Further support was given to culturaltransformation at Repsol in terms of safety and theenvironment through the Prism program: in 2012,a total of 61 events took place with 1,577attendees, 62% of whom were executives andmanagers. The courses empowered leadershipthrough innovation with Lean Managementprograms and creativity workshops, along with theimprovement of digital 2.0 skills focusing on theadoption of new work and collaboration methods(new user tools: Windows, Office, Lync, etc.).

In the B2C field (Business to Consumer), trainingwas extended to external partners so as toconstitute a tool for transformation and a mediumfor transmitting commercial policies andprojecting brand values. In 2012, there were a totalof 387 training events, with 3,680 attendees and48,010 hours of tuition.

International careersInternational careersInternational careersInternational careers

At December 31, 2012, Repsol managed a groupof 652 professionals posted abroad.

A particular highlight for the year was thecompany's ability to respond quickly to the needsarising from new projects that the company hadstarted in various countries. Proof of this was therecruitment of 166 employees with internationalprofiles, both internally and externally, and the 105migrations of existing employees between differentcountries, thus providing the company withspecific experience in key areas to face these newchallenges.

The action taken in the case of YPF, which focusedon the welfare of employees and their families after

People

Training

the company was seized, illustrates our approachto managing those posted or assigned abroad,characterized by an end-to-end process thatresponds not only to the different needs of thecompany, but also the needs of employees andtheir family members.

Specifically, on April 16, 2012, coinciding with theannouncement of YPF expropriation, a group of 42professionals from seven different countries(Bolivia, Brazil, Colombia, Ecuador, Spain,Switzerland and Venezuela) were posted toArgentina by the Repsol Group. A group of 32 YPFemployees was also assigned to seven differentcountries where the Repsol Group has businessconcerns: Bolivia, Brazil, Canada, Spain, Libya,Peru and Venezuela.

Given the new situation, Repsol needed to adopt astrategy with respect to these groups, which wasrolled out by the international assignment area incoordination with the labor relations area. As aresult, the company has proceeded torepatriate/reassign 100% of the professionalsposted in Argentina at the time of theexpropriation.


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Labourmanagement

In 2012, the company implemented a process ofcommunication and transparency with regard toremuneration, leading to three initiatives:

1. The creation of comprehensive pay bulletins,requiring the company to communicate allelements of each employee's individual pay in anup-to-date and permanent manner. It includes allcompensation headings: fixed and variableremuneration, incentives and benefits, etc. It iscurrently implemented in Spain for executives andemployees not subject to collective bargainingagreements, and in future will be extended toother countries and categories.

2. Communication of the company's remunerationsystems and criteria to all employees not subject tocollective bargaining agreements, addressing oneof the areas for improvement revealed in the mostrecent corporate climate survey (2011). Workshopswere set up with the groups of professionalemployees managed according to these systemsand criteria.

3. The preparation of audit reports for all wagereview processes responds to the need to knowhow these processes have been performed and ifthe corresponding diversity criteria have beenapplied: gender, nationality, age, and so on, withthe aim of implementing the necessaryimprovements.

With respect to employees included in collectivebargaining agreements, during 2012 evaluationcampaigns were performed at Repsol Exploración,Repsol Trading and Repsol S.A., tailored to thespecific needs of these businesses.

Innovation managementInnovation managementInnovation managementInnovation management

Innovation is a discipline that can and must bedeveloped. During 2012, the company closelyexamined the development of methods and toolsfor innovation management. The innovationleadership program has staged 20 seminars andworkshops; training events attended by 150professionals from Repsol's Innovation Network.

People

Employee remuneration

In tandem, the process of collective ideageneration focused on solving business challengeshas become consolidated, following theestablishment of a permanent corporate platformcalled "IdeasEnAcción" (Ideas in Action).

This platform supports the collective ideageneration process within Repsol and creates anIdeas Bank for future inspiration, where the best1,500 ideas are collected from 10 campaigns inwhich 13,000 professionals from around the worldhave participated.

The open organization philosophy also extendsoutside of Repsol. During 2012, educationalinitiatives were consolidated through the InspireProgram (Madrid Polytechnic University) andPasion>IE (IE Business School), both in theirsecond editions, along with collaborations on theSocial Council of Carlos III University in Madridand the EsadeCreapolis Campus in Barcelona. Inthe business sector, open innovation programshave continued to flourish at Banesto and SEAT,while new initiatives have been set in motion atBBVA, DHL, Grupo Planeta and Telefónica Digital.

Labor relationsLabor relationsLabor relationsLabor relations

The Sixth Framework Agreement signed in 2011with Spain's largest unions - CCOO and UGT -remains in force. At an international level, theRepsol Polímeros collective agreement was signedin Sines (Portugal), effective from April 1, 2012through to March 30, 2014.

The European Committee, established to facilitatethe right to information and consultation ofemployees working for community-widecorporations and corporate groups, met onSeptember 4 and 5, 2012, with the presence of thetrade unions UGT-R Portugal, Portugal CGTP,CCOO and UGT.

Meanwhile, the coordination committee of theUnion Network (Red Sindical) held a meeting inCartagena on May 28, 29 and 30, 2012 at which itanalyzed training at the Repsol Group, theintegration of differently-abled people and theresults thereof, and signed the Second Protocol forthe operation of the Union Network, effectivethrough to December 31, 2015.

Variable remuneration of employees

subject to collective bargaining

agreements

In 2012, the variable remuneration system

was deployed for employees included in

collective bargaining agreements in Spain,

linked to the achievement of the common

goals of each organizational unit.Read more

Health and safetyHealth and safetyHealth and safetyHealth and safety

During 2012, the company continued to deploy anew health and safety model throughout thegroup. This involved transmitting its contentworldwide (activities, roles and coordinationbodies), completing the analysis of health andsafety in each country, defining alternative coursesof action according to the differences found, andadopting a strategic action approach. Onehighlight of this process was the staging of acoordination meeting between countries toanalyze the new situation and establish commonlines of action.

New procedures were drafted to assist in thedevelopment and deployment of the health andsafety policy. The procedure for health indicatorswas also updated to adapt to the new health andsafety and periodic health monitoring approaches.In addition, a new phase of the internal health andsafety compliance audit plan was performed at theGeneral Chemicals, Polidux and Repsol Polymers(Sines) centers.


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R+D programmes Technological prospecting

Repsol considers that investment in R&D andinnovation geared towards leadership is one of thekey factors that make it possible to obtain a moreefficient and sustainable energy system, capable ofsimultaneously responding to the two majorchallenges in the industry: supply security andreduction of CO2 emissions while maintaining thecompetitiveness of the energy system. For thisreason, Repsol invests in R&D to help findsolutions to these hugely important challenges,thereby providing value to both the company andsociety as a whole.

Motor laboratory atRepsol's Technology Center

In 2012, theTechnology Centertook part in 14projects promotedby the Spanishgovernment and sixEuropean Unionprojects

Uncertainty about what will be the dominanttechnologies of the future, time to maturity of R&Defforts, economic cycles and pressures to reducecosts at low points in the cycle have led Repsol todevelop a Strategic Technology Plan as part of itsbusiness strategy. The lines of work set out in thisplan encompass all areas of the company:hydrocarbons exploration and production, thenatural gas value chain, oil refining and itsproducts, petrochemicals, and new types of energyfor diversifying energy production and use.

In 2012, Repsol invested €77 million in R&Dactivities carried out directly at its TechnologyCenter in Móstoles (Spain), and a further €6million in projects undertaken within thecompany's different business units. Repsolmaintains an active policy of collaborating withtechnology centers, public and private universitiesand companies in Spain and abroad. Investmentearmarked for these types of agreements topped€20 million. Repsol participates in R&D financingprojects run by different government authorities.

Repsol invested €77million in R&Dactivities carried outdirectly at itsTechnology Center

Technology

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Upstream.Upstream.Upstream.Upstream.In 2012, the Technology Division'swork in this area underwent significant changesafter the definition of the Strategic Plan forExploration and Production Technology for the2011-2015 period.

The challenge for the new plan is to develop andapply a new generation of technologies, in themedium term, to enable Repsol to successfullytackle and overcome the technological difficultiesencountered in the company's large investmentprojects in coming years. This challenge has led tothe approval, by the Exploration and ProductionManaging Division, of nine strategic projects,seven of which are being developed by theTechnology Department and the other two by theExecutive Exploration Department. The estimatedbudgets for the development of these nine projectsamount to roughly €90 million.n de 90 millones deeuros.

In this context, one of the strategic projects thatachieved significant progress in 2012 was thedevelopment of ground-breaking technology forautomated surveillance and the early detection ofoil slicks on water surfaces. During 2012, twoprototypes using this technology were tested at theTarragona refinery and the Casablanca platform inSpain, with highly promising preliminary results.These tests will continue during the first quarter of2013.

Another strategic project with significant successin 2012 was the development of a technology forevaluating exploration/production opportunityportfolios quickly and reliably; minimizing the riskinvolved in making decisions under uncertainconditions. This tool will allow us to identifyanalogous reservoirs, evaluate assets, defineoptimal production strategies, and prioritizebusiness opportunities. A remarkable aspect ofthis project is its degree of innovation, reflected bythe five patent applications filed in 2012 and fournew applications scheduled for early 2013.

Furthermore, the development of newtechnologies deployed under the 2011-2015

Technology

R&D programs

Strategic Plan for Exploration and ProductionTechnology demands the use of synergies andreliance on world-class technology developmentcenters along with continuous contact andproximity to the operational units that requirethese technological solutions. Por este motivo,algunos de For this reason, in 2012 some of theprojects were carried out at the new hubs ofHouston (USA) and Rio de Janeiro (Brazil).

Moreover, the complexity of Repsol's new depositsrequires it to remain at the forefront of analysisand interpretation technology in order to ensuretheir efficient development. Accordingly, in 2012,the experimental rock and fluid and advancedreservoir modeling laboratories located at theRepsol Technology Center continued installingstate-of-the-art equipment and technology, andrecruiting highly-qualified staff with industryexperience.

The Perla 4x project has established the guidelinesfor implementing an efficient workflow for corecharacterization studies. The Repsol TechnologyCenter aspires to become a reference point in thedevelopment of this type of study and to continuesupporting Repsol's various business unitsworldwide.

LNG and alternative technologies for gasLNG and alternative technologies for gasLNG and alternative technologies for gasLNG and alternative technologies for gasmonetizationmonetizationmonetizationmonetization Advances in the development offloating liquefaction technologies have continuedin this area with the ultimate aim of exploiting gasreserves that cannot currently be tapped in aneconomically competitive manner. In 2012, apatent for a liquefaction process for floatingsystems was approved in the United States.

In the area of alternative technologies formonetizing gas reserves, there are two promisingnew development projects in the natural gas valuechain, based on adsorption in porous materialsand conversion to natural gas hydrates.

Downstream.Downstream.Downstream.Downstream. In the area of oil refining and itsderivative products (gasoline and diesel, LPG,asphalt, lubricants, specialized products, etc.),technological knowledge is applied to optimize theoperation of refineries and enhance productquality, with particular attention paid to advancesin energy efficiency and environmental issues.

Examples of developments in this area include:technologies aimed at achieving the objectives ofthe multi-year plan for refinery energy efficiency,together with support for development of tools foroptimizing the expansion of the Cartagenarefinery, works aimed at differentiating fuels usingnew approaches ranging from gasoline and dieselto heavy fuel oils, the use of more environmentally-friendly lubricants (formulated using regeneratedraw materials and biodegradable oils), processesfacilitating the development of new products formanufacturing tires in more demanding and

competitive markets, asphalts with a lowerenvironmental impact, and support for LPGapplications for transport and integrated systemsof improved energy efficiency.

In petrochemicals, company programs remainedaimed at improving energy efficiency and costsaving, and lines of technological developmentprioritizing the creation of new differentiated andspecialty products. Derivative chemicals received aboost in 2012 with the launch of a separate rangeof catalyst-based products especially designed togenerate high-performance polymers.

Highlights for intermediate products include thedevelopment of more efficient technologies,enabling the company to reduce raw materialconsumption and the attendant costs. Thesetechnologies have been consolidated in pilotschemes, which are expected to be scaled up toindustrial level throughout 2013.

New energy. Technological developments in 2012resulted in new projects to overcome thechallenges raised in the company's businessstrategy. In this regard, biotechnology-relatedactivities were reinforced through the stakeacquired in the company NEOL, with the aim ofdeveloping biofuels through the selection andimprovement of microorganisms, and also ofstudying processes for obtaining biofuels frommicroalgae, with particular emphasis on theextraction of oils and their conversion intobiodiesel. Furthermore, in order to develop newprocesses associated with the major challenge oftransforming CO2 into added value products, fivecollaborations were set up with universities,technology centers and companies.

E-mobility activity focused on charging systems forelectric vehicles, and the development of atechnological strategy for energy storage. Finally,renewable power generation activity focused onthe selection of marine and geothermal energytechnologies, leading to the company'sparticipation in the second offshore floating windpower project to be implemented in the world atdemonstration scale.


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In order to achieve a sustainable energy future, wemust overcome ambitious technological barriers toarrive at new and better solutions, while alsoanalyzing the potential impacts of social change,scientific findings and the evolution of naturalresources. Repsol prepares systematic prospectingstudies to visualize future scenarios and, inrelation to these, identify opportunities arisingfrom the long-term evolution of technologies in theenergy and petrochemical sectors.

These include: studies on the general evolution ofenergy-related technologies, the feasibility offlexible bio-refining based on biomass availabilityand process efficiency, photovoltaic solargeneration, renewable power storage, and refiningscenarios for 2030.

Patenting policyPatenting policyPatenting policyPatenting policy

Fully aware of the huge importance and value ofresearch and development, Repsol is committed toprotecting the results of this work. In 2012, patentapplications were filed for inventions in differentareas, such as catalysts and processes for refiningand producing new rubbers.

Technology

Technology prospecting studies


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Objectives achieved Offshore safety

Safety is one of Repsol's fundamental andunwavering ethics that must guide all actions andcommitments. The company's safety principles aredefined in its Health, Safety and EnvironmentPolicy, in which Repsol pledges to conductbusiness while upholding people's health andsafety as essential values.

The management system, which is critical tobolstering safety, is comprised of a body ofregulations, procedures, technical guidelines andmanagement tools that are applicable in allcompany activities. They are being continuouslyupdated to bring them into line with sector bestpractices.

The Management Committee establishes thesafety objectives and strategic lines, which thenprovide the basis for preparing specific targets andaction plans for all company businesses. Theseplans envisage the action required to continuouslyimprove management, investments and theassociated expenses; and respond to newlegislative requirements.

Additionally, the duties of the Board of Directors'Audit and Control Committee include obtaininginformation on and steering the company's safetypolicy, directives and objectives.

The 2012 Corporate Responsibility Report lists themost notable actions carried out during thefinancial year to improve safety, and also includesdetails of the company's performance using themost relevant indicators.

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The frequency of accidents resulting in sick leave(company personnel plus contractor staff) fell 16%year-on-year, thus meeting the annual objective,which forms part of the annual objectives ofRepsol employees who have variable pay.

The goal is to achieve zero accidents from Repsol'sactivities. In the last five years, the rate of accidentsresulting in sick leave has fallen by more than 50%.Nevertheless, there were regrettably four fatalaccidents involving contractor personnel in 2012(three of which occurred in traffic accidents).

The safety management system is aligned withinternational standard OHSAS 18001(Occupational Health and Safety ManagementSystem). Repsol encourages the gradualcertification of all the company's centers accordingto this standard as a way of promoting continuousimprovement and obtaining external validation ofmanagement systems. Certification currentlyextends to all refineries and chemical plants,practically all lubricant and specialty facilities,several exploration and production facilities, and agrowing number of facilities for other activities.

In the last five years,the rate of accidentsresulting in sickleave fell by morethan 50%

Notable safety management milestones achievedin new projects include the project to upgrade therefinery in Cartagena, which has posed a majorchallenge for the company due to its scale. Thelargest-ever industrial investment in Spain wasmade in an attempt to make Cartagena one of thebest refineries in the world in terms of productiontechnology, environmental sustainability, andemployee safety. The accident rate for the wholeexpansion process was one-fiftieth of the averagefor the Spanish construction sector, even if weinclude the industrial installation process, withspecific risks during the testing and start-up ofequipment. Overall, in the five years the projectremained in progress and among the close to20,000 persons who worked on it, only minorinjuries were sustained on the site, such as twistsand sprains.

Also noteworthy were the tasks performed to wrapup this project during the commissioning and

Safety

Objectives met

implementation stages, which, owing to theproject's unusual characteristics, demanded arigorous approach to safety. The result of this hardwork can be considered a success, as more than1,500 people (including company employees andoutsourced personnel) completed thecommissioning tasks, after more than 1.5 millionhours, without any serious accidents. The keys tothis process were appropriate staffing levels,optimal training and painstaking thoroughness.


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Repsol has experience in offshore operations andhas performed deepwater operations both in theGulf of Mexico and Brazil, and in other parts of theworld.

The company is an active member of the Oil andGas Producers Association (OGP), the umbrellaorganization for companies producing oil and gasfor the promotion of safe and sustainableoperations. In order to ensure that lessons learnedfrom industry accidents are implemented inoffshore operations around the world, theorganization issued a series of recommendationsthat are consistently applied in the company'sdrilling projects.

These recommendations improve the spillprevention and response capabilities of offshoredrilling operations and include the following keyissues adopted by the company:

Introduction of review and project managementprocesses (Comprehensive ProjectManagement), peer reviews, equipmentintegrity audits, and internal and externalmanagement systems audits.

Risk management during all phases of drillingprojects, conducting qualitative andquantitative analysis studies in accordance withthe company's internal regulations.

Skills evaluations to ensure individuals andteams have the ability to understand andmanage risks. Performing staff competencyassessments, especially for individualsresponsible for critical safety and environmentalprotection.

Application of international standards and bestpractices to ensure that the most up-to-datestandards are applied in Repsol's projects.

Application of the double barrier approach inthe design of production wells to prevent thespilling of oil or other fluids into theenvironment.

Emergency response, strengthening the

Safety

Offshore operations

implementation of the company's emergencyresponse procedures and plans at differentlevels (local, regional and internationalemergencies).

Spill response integrated into emergencyresponse procedures, defining potential spillscenarios for each offshore well and developingthe corresponding control plans. In addition,Repsol is a member of Oil Spill Response (OSR), an international organization formed by oiloperators and specialized in the prevention andcontrol of oil spills and providing relevanttechnical assistance.


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Repsol's principles for the environment aredefined in its Health, Safety and EnvironmentPolicy, which applies across the company. Negativeimpacts on the environment can be mitigated byintroducing environmental criteria across theentire business cycle.

Repsol wasrecognized byNewsweek magazineas the company withthe bestenvironmentalperformance in theenergy sector inGreen Ranking 2012

Our commitment to protecting the environment isshown through our ongoing efforts to prevent anypossible impacts of our activities on theenvironment. We therefore adopt variousmeasures, such as: identifying, analyzing andmitigating impacts; improving the design of ourfacilities, processes and management systems;and investing in new technologies.

The Management Committee establishes theobjectives and strategic lines for environmentalprotection, which are the basis for preparingobjectives and action plans for all companybusinesses. Additionally, the duties of the Board ofDirectors' Audit and Control Committee includeobtaining information on and steering thecompany's environmental protection policy,directives and objectives.

The environmental management system is alignedwith international standard ISO 14001. Repsolencourages progressive certification of companycenters according to that standard as a way ofpromoting continuous improvements andobtaining external validation of managementsystems.

El sistema de gestión del medio ambiente estáalineado con la Certification currently extends to allrefineries and chemical plants, all lubricant andspecialty facilities, practically all exploration andproduction facilities, and a growing number of

Protecting the environment

facilities for other activities (all the certified centerscan be consulted at repsol.com).

During 2012, the company made significantenvironmental investments with the aim of:improving the environmental quality of petroleumproducts, minimizing air emissions, increasingenergy efficiency, optimizing water consumption,reducing the contaminating component of wasteand improving spill prevention systems. All of thiswas achieved by applying the available bestpractices and technological innovation. Also ofnote is the work undertaken to identify, evaluateand correct possible past contaminationsituations. Note 36 of the Consolidated FinancialStatements provides information on assets,provisions, expenses and future actions of anenvironmental nature.

From an environmental perspective, the newfacilities at the Cartagena refinery produce cleanfuel for transport, thus promoting the use ofbiofuels and maximizing energy efficiency in theproduction process. The new industrial complex inCartagena is already a world leader inenvironmental sustainability, safety and energyefficiency. A new cogeneration facility will be joinedby wastewater and sulfur recovery plants, whichcomfortably meet the most stringentenvironmental requirements.

A reduction of morethan 400,000 tons ofCO2 equivalent was

achieved in 2012through specificenergy savingsactions

Repsol's commitment to the environment, whichcomprises one of the basic principles of thecompany, has also been apparent during allphases of the project to build the company's newheadquarters, known as the Repsol Campus.LEED® environmental certification has beenchosen to independently and externally validatecompliance with the most highly-regardedstandards for sustainability in construction. Thiscertification, which is endorsed by the UnitedStates Green Building Council, analyzes the entirelife cycle of the building and is the most widely-recognized international certification.

In addition, Repsol was recognized for the secondyear running by Newsweek magazine as thecompany with the best environmentalperformance in the energy sector in GreenRanking 2012. This ranking assesses theenvironmental practices of the top 500 listedcompanies worldwide. It considers threecategories: environmental impacts, theenvironmental management system andtransparency in environmental reporting. Thisyear, the company's transparency was verypositively evaluated in the environmental reportingcategory. Moreover, the company scored highly inthe environmental management system category.This achievement stemmed from the programs,initiatives and certifications implemented acrossthe entire organization to meet the commitmentsset forth in the Safety, Health and Environment

Repsol achieved, ayear ahead ofschedule, thestrategic objective ofreducing emissionsby 2.5 million tonsof CO2 equivalent

during the2005-2013 period

Policy.

This recognition is the result of the company'sjoint effort to improve its environmentalperformance, and it shows Repsol's commitmentas a leader and benchmark for transparency in itssector.

The 2012 Corporate Responsibility Report lists themost notable actions carried out during thefinancial year to improve environmentalprotection, and also includes details of thecompany's performance using the most relevantindicators.

Sustainable energy and climate changeSustainable energy and climate changeSustainable energy and climate changeSustainable energy and climate change

Repsol is committed to building a better futurethrough smart energy initiatives; offering the bestenergy solutions to society and the planet. Thismeans using a wide variety of sources andoptimizing their use through energy managementsystems to achieve excellent energy performance.

This commitment by Repsol is reflected in theupdated Corporate Global Carbon Strategy for2012-2020, which aims to boost the company'svision of a more diversified and less carbon-intensive energy supply. The Carbon Strategy's endgoal is to devise a common action plan thatharmonizes existing initiatives and detectssynergies through an integrated focus.

This strategy is founded on intelligent riskmanagement, following the path to excellence byreducing the carbon footprint throughout thevalue chain and preparing for the future throughnon-fossil energy initiatives.

Repsol's Management Committee is in charge ofapproving the company's Carbon Strategy andevaluating its implementation. This strategy isreviewed annually in order to stay at the forefront.Additionally, since 2005, the duties of the Board ofDirectors' Audit and Control Committee includeobtaining information on and steering thecompany's safety and environmental policy,directives and objectives, including energy andcarbon management.

Repsol has set a strategic objective of cutting 2.5million tons of CO2 equivalent during the2005-2013 period. This is displayed in annualreduction objectives with respect to a business-as-usual scenario, which are approved by thecompany's Management Committee, and formpart of the annual objectives for most of the Repsolemployees who performance-related variable pay. Areduction of more than 400,000 tons of CO2

equivalent was achieved in 2012 through specificenergy saving actions. The cumulative reductionas a product of all actions undertaken during the2006-2012 period amounts to more than 2.5million tons of CO2 equivalent, thus fulfilling the

Repsol is the leadingcompany in theenergy sector interms of carbonmanagementperformance,according to theglobal index of theClimate DisclosureProject

strategic goal set, one year ahead of schedule.

One of the main strategic objectives in energyterms is the implementation of an EnergyManagement System based on continuousimprovement. These systems favor acomprehensive and systematic managementapproach, promoting cost savings and affirmingthe company's commitment to supplyingsustainable energy. Within this system, Repsol haspinpointed a number of priorities that shape itslong-term energy strategy. It is essential to identifyand continuously update the existing savingspotential of the company to establish quantifiedenergy efficiency targets, and ensure theconsistency of these objectives with the long-termgoals defined in the company's Carbon Strategy.

Repsol's Energy Management System isimplemented according to the requirements ofInternational Standard ISO 50001. This standardenables procedures and systems to be establishedthat improve the energy performance oforganizations. This leads to a reduction ingreenhouse gas emissions and otherenvironmental impacts, at the same time asreducing energy costs.

This effort to surpass our targets is already bearingfruits. Firstly, the introduction of these systemsenables the company to measure and monitor theeffectiveness of all the energy-saving actionsundertaken; the improvement in the EnergySavings Index demonstrates our ability to saveenergy while maintaining excellent performancelevels. Secondly, gradual certification of the EnergyManagement Systems across the various businessunits according to international standard ISO50001 ? as in the case of the A Coruña refinery in2011 ? shows the company's commitment toefficient energy management with third parties. Asexpected, the Puertollano refinery achieved ISO50001 certification in 2012.

Repsol aims to compile a company-wide carbonfootprint, requiring it to expand the scope ofemission inventories to include its suppliers,customers and own activities. In 2012, progresswas made in CO2 emissions inventories, withmore than 90% of these emissions being verifiedaccording to international standard ISO 14064.

Repsol is the leading company in the energy sectorin terms of carbon management performance,according to the global index of the ClimateDisclosure Project. This is the third time in fiveyears that the company has been recognized for itscarbon management and energy efficiency efforts,and in the past five years Repsol has been thecompany with the greatest presence in the ClimateDisclosure Leadership Index (CDLI), the mostprestigious international climate changebenchmark. Managing risks and opportunities

associated with climate change, improving energyefficiency, and rolling out greenhouse gasemissions inventories, are just some of the aspectsfor which the company has received recognition.


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HR and transparency

As an energy company that contributes tosustainable development, Repsol is able tounderstand the expectations of its stakeholders.This is only possible through a corporateresponsibility model that integrates theseexpectations in all internal decision-makingprocesses.

Repsol has publiclycommitted to a totalof 278 short- tomedium-termactions, 80% ofwhich relate toemployees' variablepay

After the final definition of Repsol's corporateresponsibility model and the implementation of acorporate responsibility coordination system atcompany and country level with the creation of theCorporate Responsibility Committees, workcontinued in 2012 to deploy the system atoperational center level. During the year, wedeveloped a common methodology for identifyingstakeholders' expectations and integrating theminto the company's decision-making process at themain production centers with the aim ofimplementing performance-boosting initiatives.

As a result of these processes, a special effort wasmade in 2012 to meet the expectations ofstakeholders regarding Repsol's ethical, social andenvironmental performance. To this end, corporateand country-specific expectations studies wereconducted, taking all stakeholders into account.Repsol compiled national studies in four countriesaddressed at employees, the value chain,government agencies, the media, the localcommunity and civil society. In 2012, the thirdcorporate sustainability plan was approved with ahorizon of 2013. In addition, the first nationalsustainability plans were approved and released in


Corporate responsibility

four countries: Spain, Bolivia, Ecuador and Peru.Through these plans, actions have been definedthat will be developed over the next two years tobring the company's performance up to theexpectations of its stakeholders.

Through its sustainability plans, Repsol haspublicly committed to a total of 278 short- tomedium-term actions, 80% of which relate toemployees' variable pay.

As part of its commitment to transparency, during2012 Repsol organized the first visit by civilians toone of its main oil production operations inEcuador.

Each year, the company publishes its CorporateResponsibility Report, in which it disclosesinformation on its annual performance and itsethical, social and environmental progress.However, Repsol understands that there arespecific issues related to its activities andoperations that are of particular local communityinterest, and therefore in 2012 it also published,for the fourth consecutive year, the Repsol EcuadorCorporate Responsibility Report and, for the firsttime, the Repsol Peru Corporate ResponsibilityReport. Like the overarching CorporateResponsibility Report, both publications adhere tothe standards of the Global Reporting Initiative(GRI). The company also presented the ProgressReport of the United Nations Global Compact,showing an advanced level of application andreinforcing its commitment to this initiative, whichit has supported since 2003.


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HR and transparency

During 2012, work continued on integrating theUnited Nations "Protect, Respect and Remedy"framework and the guiding principles forcompanies and human rights. In this sense,Repsol prepared its draft Policy on Human Rights,which has been submitted to externalorganizations for their comments. The companyhas set a goal of adopting this policy in 2013. Ahuman rights course was also given to all Repsolemployees to explain this commitment, theunderlying framework and how it is beingimplemented. The course began with a pilot teststaged for more than 400 company employees,and will be extended to other areas and businessesin forthcoming years.

The company is afounding partner ofthe ExtractiveIndustryTransparencyInitiative

Repsol believes that the appropriate managementof revenues from extractive activities, wherever itoperates, should have a positive impact on localeconomies. For this reason, the company is afounding partner of the Extractive IndustryTransparency Initiative, which promotes thetransparency of financial reports among extractiveindustry companies (mining, oil and gas) to avoidcorruption, social injustice and conflicts.

For yet another year, the company's performancein terms of corporate responsibility wasrecognized, with the company continuing to beranked on the following prestigious sustainabilityindexes: FTSE4Good, Ethibel Sustainability andDow Jones Sustainability. In this last instance andfor the second consecutive year, Repsol achievedthe maximum rating, becoming the industryleader. Thanks to all this, the company again


Human rights and transparency

received the "Gold Class" company rating from theSustainability Yearbook 2012, which recognizescompanies with the best sustainabilityperformance.

Repsol's presence in international sustainabilityindexes is proof of its strong commitment toethical, environmental and social values as part ofits corporate culture. In turn, it is recognition ofthe company's commitment to transparency andcorporate responsibility.

In 2012, Repsol, the Repsol Foundation and theAyuda en Acción (Action Aid) Foundation signed acollaboration agreement. One of the envisagedactions is for the service station network in Spainto sell fair trade products supplied by Ayuda enAcción. This joint initiative will also be anopportunity to share acquired knowledge andexperience on the reality of the communities andenvironments in which the company operates, andthus define cooperation projects that will generatebenefits for these communities.


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Media Repsol online

Repsol believes that communication is a keyelement in its relationship with society. In order toadequately manage communications, it offers itsmain stakeholders various on- and offline toolsthrough which it effectively and transparentlyreports on its activities and businesses. Thecurrent context is marked by a shift of audiences todigital media and a proliferation of new Internetleads, although the press and news agenciesmaintain their position as generators of influenceand opinion. Users tend to seek their owninformation sources and the traditional news cycleis vanishing owing to new social network channels.

The General ShareholdersMeeting is the mostimportant event in thecalendar for any company.

In 2012, efforts weremade to boost thefinancialcommunity's accessto companyinformation

In this context, Repsol is committed to acommunications strategy based on proximity,truthfulness and speed as the main principlesguiding its Communications Department.

Shareholders and investorsShareholders and investorsShareholders and investorsShareholders and investors

These important stakeholders have numerousmeans at their disposal to access the company'sfinancial and operating information and any eventsthat could affect the value of their shares. Since itbecame a listed company in 1989, Repsol hasoperated a Shareholder Information Office and anInvestor Relations Department, through which itserves its investors, both current and prospective,and securities analysts, in relation both shares andfixed income securities.

In recent years, analyst coverage of the companyhas greatly increased, reaching a total of 40 activefollowers of Repsol's performance.

In order to satisfy it minority shareholders'

Communication

information needs, Repsol has set up aShareholder Information Office. Shareholders canpersonally visit the office, call the free line 900 100100, or write via regular post or email, in order toobtain any information required. The ShareholderInformation Office answered some 45,000 calls in2012 (an average of 170 per day). The mostfrequent questions concerned share values, theGeneral Shareholders Meeting, dividend paymentpolicies and dates, the performance of preferencestock and relevant events.

Moreover, all relevant information can be found onthe corporate website (www.repsol.com) along withspecific content in the "Shareholders andinvestors" section. This section had more than390,000 visits in 2012. The website also includes anumber of email addresses (the generic address [email protected]), to which inquiriescan be addressed and publications requested. In2012 these mailboxes received over 6,000 emails.

The Investor Relations Department also constantlyliaises with institutional investors and financialanalysts. Throughout the year several roadshows(visits to different cities to visit institutionalinvestors) were held in Europe, America and Asia,with the participation of senior executives and theInvestor Relations team. We visited a total of 488institutional investors in 34 cities worldwide.

Moreover, Repsol attended 22 sector conferences,both in Europe and in the United States, duringwhich meetings with institutional investors werealso held. If visits to the company's office areadded to the above, a total of approximately 900institutional investors were contacted in 2012.

In 2012, efforts were made to boost the financialcommunity's access to company information.

To this end, an application was developed forshareholders and investors to consult informationusing mobile devices (tablets and smartphones).This application can be downloaded for free onRepsol's website.


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Media Repsol online

The Communication and Chairman's OfficeExecutive Managing Division is responsible forserving the media under the principles oftransparency, proximity, rigor and truthfulness. Tothis end, Repsol has various channels in placethrough which it manages information requestsfrom the media.

The corporate website (repsol.com) dincludes aPress Room where information about the RepsolGroup and its activities is available to the press. Inaddition to press releases, it includes graphic andmultimedia files, publications, specific dossiersand newsletters intended for journalists from allover the world.

This communication drive has turned Repsol intothe best-regarded company in the energy sector byjournalists, according to the Ipsos Public Affairsstudy conducted in the last quarter of the year tomeasure the corporate reputation of large Spanishcompanies.

Information for

new devices

The company is

committed to

ensuring its

information can be

accessed through all

devices on the

market, such as

tablets and

smartphones.Read more

The main activities of the Repsol Group in 2012were made known to the media through morethan 60 press releases. In addition to these, morethan 70 further press releases were issued by thefive industrial facilities in Spain, as well as releasesissued in countries where the company operates,releases associated with sports sponsorshipprojects, and those relating to specific businesses,such as liquefied petroleum gas (LPG), or theRepsol Foundation.

In order to maintain a close relationship with themedia, a number of press conferences andinformation sessions were held in 2012. Aparticular highlight was the presentation by RepsolChairman, Antonio Brufau, of the 2012-2016Strategic Plan (May 29). Also, on April 18,journalists attended the unveiling of the upgradedCartagena refinery at a ceremony presided over bythe Prince of Asturias.

In 2012, Repsol consolidated News; a new tool formedia relations launched in 2011 to share Repsolexperiences and projects less from a current affairs

Communication

Media

perspective and more from an educational angle.News is disseminated among more than 2,000journalists.

During the year, the well-known guide How theEnergy Industry Works was again translated intoSpanish and distributed among journalists,institutions, universities and associations, and alsoRepsol offices worldwide. It is an educational workpublished each year by the International EnergyAgency, and is an invaluable reference point foranyone who is not an energy expert.

To respond to journalists' requests for information,the General Communications Department has anemail address ([email protected]), throughwhich more than 4,000 inquiries and requests forinformation were received in 2012, reflecting thehigh level of media interest in Repsol activities.Through this channel, the company is able toquickly and effectively answer the many requestsfrom the media on a daily basis.

Looking ahead, communication challenges willrevolve around new forms of communication, themass dissemination of content through multipleglobally-driven channels, the need for integratedcommunication strategies (and at the same timespecific strategies for each device), the growingimportance of news monitoring and analysis, andthe increasing demand for in-house materials suchas infographics, reports and videos.


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Media Repsol online

2012 was a year of progress in digitalcommunications for the company. The generationof content in multiple formats and for all devicesand the optimization of the user experience,formed the mainstays of each of Repsol's actionsin the digital environment.

Accordingly, thanks to its untiring work in thedynamic digital environment, repsol.com remainsa leader in digital communications and continuesto consolidate itself as a valuable communicationchannel, with an average monthly audience of 2million unique users, 3.5 million visits and 37million page views.

One remarkable milestone was the major overhaulof the corporate website. This began with acomplete redesign of the home page, allowing thecompany to be presented in a more effectivemanner thanks to a clear information hierarchy.The design has taken into consideration theconcerns of the many types of users visiting thewebsite, who expect to access information quicklyand simply.

Coinciding with the presentation of the 2012-2016Strategic Plan, which accompanied the company'snew vision and brand change, the repsol.comportal was extensively overhauled in May 2012.Changes were made from a design point of view,adjusting the layout to reflect the new identity, andfrom a content viewpoint - including informationto help communicate the strategic plan and newvision.

Another milestone in 2012 was to adapt all contentrelated to YPF after the expropriation, especiallyregarding the company's global presence, financialinformation and range of products and services.

One highlight regarding themed content was thereinforcement of the trust- and empathy-basedrelationships generated through the Repsol Guideand Repsol Racing channels thanks to interactionwith users and the creation of interesting,engaging and fun content. With over 146,000followers on the major social networks: Facebook,

Communication

Repsol on the Internet

Twitter, Google+, Flickr, YouTube, Instagram andPinterest, the Repsol Guide and Repsol Racingchannels have reaffirmed their Internet popularityand demonstrate Repsol's increasing commitmentto be close to its audiences, to listen to them andto offer quality services.


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The balance of factors that drive the success of acompany has changed significantly. Before, solidfinancial results were enough to ensure success;today however, it depends heavily on winning thetrust of an organization's most significantstakeholders.

Building trust involves having strong anddifferentiated brands, capable of meetingstakeholders' expectations through excellentcorporate conduct and timely and relevantcommunications.

The brand defines the company's commitment tostakeholders, while reputation is the valuejudgment stakeholders have in the companyhonoring this pledge.

One of Repsol's priorities is the professionalmanagement of brand and reputation. This taskfalls to the Intangible Assets Department, whichaims to integrate an awareness of society'sconcerns into the company's business andcommunications activities to achieve this.

In 2012, Repsol presented its new vision,illustrating what it wants to become and how itwants to be recognized. This new vision forms thefoundation of Repsol's recognition model andaction plan for reputation management.

Repsol is a company at the forefront of reputation

Intangible asset managementNew Repsol vision"Repsol is a global company that seeks to ensure people's welfareand believes in building a better future through the developmentof smart energy.Our efforts, talent and enthusiasm enable us to offer the bestenergy solutions to society and the planet."

management, recognized as the company with thethird-best reputation in Spain by the prestigiousSpanish Corporate Reputation Monitor (MERCO).

It is a founding sponsor of the CorporateExcellence Foundation: Center for ReputationLeadership; a think tank focused on sharing bestpractices and knowledge regarding advances inreputation management.

In line with the most advanced internationalcompanies, this management is seen from athree-tier perspective: top management as themain driver, a specialized department forreputation management, and a cross-cuttingscope as a prerequisite for success.

Repsol's Reputation Department addresses themost important aspects of reputationmanagement: understanding the social context(off and online), metrics, reputational risks,recognition boosting, communication, etc.

Another key component in Repsol's culturalchange process is the revitalization of thecompany's brand and visual identity systems.

With this new vision as a departure point, theBranding Plan started in 2011 has led to thecorporate logo being optimized and the differentelements of identity strengthened.

In 2012, the new brand and visual identity waslaunched and deployment has already started inthe service station network, products, buildingsand all the company's areas worldwide.

One of the most visible applications is Repsol'snew corporate headquarters, which offers a newway to relate with the brand. This new brandstrategy is implicit throughout the entire designand construction process. The four buildings thatmake up the complex are each painted in one ofthe four corporate colors, and named accordingly.


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For yet another year, Repsol has been the mainprotagonist of the Motorcycle WorldChampionship, the most demanding internationalmotorsports event and which provides the bestpossible testing ground for Repsol's fuels andlubricants. It is precisely the experience acquired inthe development of specific products for topcompetitions that enables Repsol to remain aleader in research and thus be capable of fulfillingits customers' highest expectations.

Great results were achieved in the 2012 seasonthanks to the performance of the Repsol riders,who participated in numerous internationalcompetitions. In MotoGP, the Repsol Honda Teamwas crowned the team World Champion. DaniPedrosa, in what was his best year, was second inthis category and Casey Stoner came third overall.The Repsol team completed a brilliant season: itsdrivers reached the podium in 12 of the 18 races.

In the Moto2 class, Marc Marquez managed towin the championship. His presence, beside DaniPedrosa on the Repsol Honda MotoGP team forthe 2013 season will be a clear guarantee of thecompany's sponsorship success.

Supporting young ridersSupporting young ridersSupporting young ridersSupporting young riders

In the Moto3 category, Alex Rins was the bestrookie in his class and the rest of our young ridersfinished in the top 10, excelling in many WorldChampionship races.

As part of its objective to promote grassrootssport, Repsol cosponsored the Spain SpeedChampionship (Campeonato de España deVelocidad), where a very young rider, AlexMárquez, sponsored by Repsol, was proclaimedchampion.

Sponsorship

Repsol won the Trial Indoor and Outdoor WorldChampionship in the men's category for anotheryear. Toni Bou has claimed 11 worldchampionships and at 27 years old, has won themost championships ever in the history of thesport.

Repsol is a company committed to Olympic sportsthrough its collaboration with the ADO plan,which helps many young sportspeople to live thedream of taking part in the Olympic Games.London 2012 reflected the high level of Spanishsport.

For the second year running, sponsorship wasgiven to the Repsol aerobatics team, whichbecame Spanish champion and took part inseveral national and international air shows, one ofthem on occasion of the opening of the upgradedCartagena refinery. Support also continued for theclassic car team, the Repsol Classic Team.

Repsol also has a training sponsorship program.Through this program it seeks to support youtheducation through scholarships for mechanicaland engineering studies at the MonlauCompetition school.


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EducationalGuidance

Integration andvolunteering

Internationalaction

RepsolFoundation Ecuador

As an expression of Repsol's social responsibilityvalues and its voluntary commitment to thesustained improvement of society, the RepsolFoundation channels a variety of social and culturalactivities in the countries in which the companyoperates.

A total of 479applications werereceived, 95% fromSpain.

The Entrepreneurs Fund, launched in 2011 topromote and support innovative business projectsin energy efficiency, closed its first call forproposals with over 400 applications. On March20, 2013, the Prince of Asturias met theentrepreneurs behind the seven winning businessprojects, who visited the La Zarzuela Palace alongwith the Chairman of Repsol and the Foundation,Antonio Brufau.

The projects are at the start-up stage and coverareas from power generation to distribution andend use. These projects are supported through theprovision of technological, business and legaladvice and funding of between €6,000 and€12,000 per month during the necessary periodfor their development, along with access to theRepsol Group's industrial infrastructure.Subsequently, contacts will be facilitated withpotential investors to put the projects on themarket.

The second proposal call for the EntrepreneursFund ran from June 16, 2012 to November 16.

The Foundation maintains its objective ofcontributing to a more sustainable, efficient andcompetitive energy model. Within its Energy

Repsol Foundation

Repsol Foundation

Observatory framework, the Foundation continuedwith its studies and publications, updating theRepsol Energy Efficiency and Greenhouse GasEmission Intensity (GHG) indexes, which analyzethe entire energy lifecycle using internal indexesand from well to pump.


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The Repsol Foundation also works to promote andspread scientific knowledge among young people.To this end, the Education Project in TechnicalCreativity was launched in cooperation with theFundación Educativa Universidad de Padres(Parents' University Education Foundation). Itsaim, through the monthly publication of the"Energía Creadora" (Creative Energy) magazine, isto help spark interest in science and technology asthe foundation for scientific and technologicalprogress, and encourage young people toinvestigate and innovate. Under this framework,the Foundation also published the white paper"How to build a culture of excellence, innovationand entrepreneurship: A lesson in social action".

In line with its commitment to meeting newtraining requirements, the Foundation continuedits scholarship program in collaboration withPetronor as well as the A Coruña and Tarragonarefineries (Spain). The scholarship program aimsto promote vocational training in the specialtiesmost required by the company, and provideprofessional employment opportunities amongyoung people.

At university level, highlights include the programsat the Rovira i Virgili University in Tarragona andthe Cartagena Polytechnic University to facilitateuniversity access to students with economicand/or social difficulties and a good academicrecord.

In the 2011-2012 academic year, the Foundationgranted more than €347,000 in trainingscholarships, benefiting more than 160 students.

Repsol Foundation

Focus on education


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The integration of people with disabilities is one ofthe Repsol Foundation's main priorities, rollingout social, cultural and sports programs that fosterequal opportunities and the full social integrationof disabled individuals.

207 initiatives were carried out in 2012, directlybenefiting more than 41,700 people.

As part of the "Recapacita" project, an initiative toraise awareness about the difficulties thatmembers of this group face in their daily lives, theGames for Integration were held in Tarragona,Madrid, Cartagena and Puertollano, with theparticipation of 17,000 people. The project aims topromote social integration through sport andhighlight the importance of the equalopportunities values transmitted throughcompetition.

Over 48,000 peoplehave benefitted fromthe volunteeractivities organizedby the Foundation

Also noteworthy is the program Your EducationHas No Limits: Develop Your Future. Conductedin conjunction with the ONCE Foundation, theprogram's purpose is to increase the universitypresence of students with disabilities. In 2012,four special awareness days were held inTarragona, Puertollano, A Coruña and Cartagena.

Another highlight is the creation of the Telefónica-Repsol Foundation Chair of Family and Disabilityat the Comillas Pontifical University, in order toinvestigate and promote the quality of life ofpeople with intellectual disabilities and theirfamilies, from a professional, innovative andcritical perspective through social commitment.

Another highlight is the creation of the Telefónica-Repsol Foundation Chair of Family and Disabilityat the Comillas Pontifical University, in order toinvestigate and promote the quality of life ofpeople with intellectual disabilities and theirfamilies, from a professional, innovative andcritical perspective through social commitment.

Furthermore, the Foundation took part in theinternational volunteer project Madrid por Madrid(Cities of Service), also joining the Voluntare

Repsol Foundation

Equal opportunities and volunteering

corporate volunteer network, and Engage, aunique international platform providing supportfor companies in this area.


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Beyond Spain's borders, the Repsol Foundationcontinued working on specific communitydevelopment, health, education, social inclusionand opportunity-creation programs that meet thereal needs of disadvantaged social groups in thecommunities in which the company operates.

In the field of education, in Peru programs weredeveloped for young people with low income andat risk of social exclusion in Pachacutec andArequipa, providing them with access to betterschooling and eventually university education.

In Bolivia, the Foundation is working with theNational Theatre School in order to providecomprehensive training for young people withlimited resources, and promote the actingprofession across the country.

The work of theRepsol Foundationwas recognized in2012 with severalawards such as theCOCEMFE Awardand the BobathFoundation Award

Specific programs have been undertaken toaddress health problems identified in each of thecountries:

Improving ocular health in Bolivia and Peru.

Equipment for and improvements to healthcarefacilities at the San José Obrero Hospital inPortachuelo, Bolivia.

Hearing health in Morocco.

Promotion of food and nutrition safety in Peruto reduce anemia in children aged under fiveand their mothers.

Care for children in extreme poverty at theColombian Comprehensive Child DevelopmentCenter, and training for adolescent mothers.

An HIV/AIDS prevention program and organdonation and transplant program in Trinidadand Tobago.

The Repsol Ecuador Foundation brings citizensinto contact with culture, music, literature and thearts through various activities and partnerships. Italso contributes to the important work ofspreading awareness of Spain's culture throughcollaboration agreements and membership ofinstitutions such as the Cervantes Institute's

Repsol Foundation

International action

Círculo de Amigos and the Amigos Foundation ofSpain's National Library.

In 2012, the work of the Repsol Foundation wasrecognized, in different areas, with several awardssuch as:

the COCEMFE Award in the category of "BestCompany" for its work towards the socialintegration of people with disabilities; the BobathFoundation Award for its work in the integration ofpeople with cerebral palsy; the El Vigía GroupAward for best corporate social responsibilityinitiative of the year; and the award from theAssociation of Young Entrepreneurs of Madrid, inrecognition of the Foundation's work to promoteand support the development of best businessprojects through the Entrepreneurs Fund.


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During 2012, five new projects were supported asa result of the 2011 call for funding proposals:

1. "Enterprising education for the progress of myregion", implemented by the Junior AchievementFoundation.

Settlements in the Ecuadorian Amazon located inthe area directly affected by the route of theSPF-OCP pipeline are covered by the communitydevelopment and support framework programbeing deployed by Repsol Ecuador.

With the support of the Repsol EcuadorFoundation, one of the priorities identified withinthese communities involves training andeducational initiatives.

The Repsol EcuadorFoundationsupported five newprojects in 2012

2. Strengthening women's and youthorganizations in Sucumbíos, implemented by theIntegral Development for the Future Foundation(FUDEN).

The project aims to involve 500 women and youngpeople from the districts of Lago Agrio andSucumbios in the Ecuadorian Amazon inproductive and organizational developmentprocesses to enhance their skills and improve thequality of their domestic and community life.

As a result of this process, 400 women and youngpeople are participating in 125 ventures, and arenow earning income.

The project's chief priority is supporting thedevelopment of indigenous and mixed-descentcommunities located in areas of indirect influenceof Block 16, where Repsol Ecuador operates.

3. Further emphasis on financial services in therural areas of Orellana and Sucumbíos province asan alternative to develop production.

This project, funded by the Repsol EcuadorFoundation and executed by the Rural FinancialNetwork, consists in introducing integratedfinancial products and services in rural andmarginal urban areas of Eastern Ecuador.

Repsol Foundation

Repsol Ecuador Foundation

Upon completion of the initiative, it is estimatedthat about 10,000 entrepreneurs or micro-entrepreneurs will have access to financialservices. Economies of scale are also expected tobe generated in the area, which will benefit about30,000 people, including the families of theentrepreneurs and other players in the localeconomy.

4. Promotion and protection of local culture as aneducational tool for human development.

This project involves the local government ofFrancisco de Orellana and the Alejandro LabakaFoundation, with the Vicariate of Aguarico andsupport from the Repsol Ecuador Foundation inthe framework of the project to promote anddefend local culture as a development tool,together with the Basque government, with thesupport of the Ecuadorean National Institute ofCultural Heritage.

5. Crowd funding for female entrepreneurs inSucumbíos and Orellana, conducted by theGrameen Amazonas Savings and CreditCooperative.

This project attempts to further improve the socio-economic conditions of women living in rural andmarginal urban areas in the provinces ofSucumbíos and Orellana, in the EcuadoreanAmazon, providing access to crowd fundingservices so that they can start and maintain smallincome-generating ventures for themselves andtheir families.


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OIL AND GAS

LENGTH

MASS

VOLUME

CONVERSION CHART

Litres Barrels Cubicmetres

Toe Cubicmetres

Cubicfeet

OILOILOILOIL 1 barrel(1) b 158.98 1 0.16 0.14 162.60 5,615

1 cubicmetre(1)

m3 1,000 6.29 1 0.86 1,033 36,481

1 tonne of oilequivalent(1)

toe 1,160.49 7.30 1.16 1 1,187 41,911

gasgasgasgas 1 cubicmetre

m3 0.98 0.01 0.001 0.001 1 35.32

1.000 cubicfeet=1.04x1006

Btu

ft3 27.64 0.18 0.027 0.024 28.317 1,000

Metre Inch Foot Yard

MetreMetreMetreMetre m 1 39.37 3,281 1.093

InchInchInchInch in 0.025 1 0.083 0.028

FootFootFootFoot ft 0.305 12 1 0.333

YardYardYardYard yd 0.914 36 3 1

Kilogramme Pound Tonelada

KilogrammeKilogrammeKilogrammeKilogramme kg 1 2.2046 0.001

PoundPoundPoundPound lb 0.4536 1 0.00045

TonTonTonTon t 1,000 22.046 1

Cubic feet Barrel Litre Cubic metres

Cubic feetCubic feetCubic feetCubic feet ft3 1 0.1781 28.32 0.0283

BarrelBarrelBarrelBarrel b 5,615 1 158.98 0.1590

LitreLitreLitreLitre l 0.0353 0.0063 1 0.001

Cubic metreCubic metreCubic metreCubic metre m3 35.3107 6.2898 1,000 1

(1) Reference measurement: 32.35° API and relative density of 0.8636


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